Life Insurance by Design
At its simplest form, life insurance is a policy that provides coverage on your life to protect your family and estate when you pass on. With this simplicity, purchasing life insurance sounds straightforward, right?
It would be if all life insurance products are the exact same. But even if the products are similar, there are many other things that you should be considering such as the insurance company’s reputation (an insurance company’s rating will tell you how likely the company will be around to payout claims upon your death) and insurance price range (do you have budget for how much you can pay in premium? Certain carriers will be cheaper than others.). In addition, life insurance varies based on duration and extra features on the products that is more than just the death benefit protection. Some of these features include long-term care riders and a cash value account in the permanent life products that the owner can withdraw or take out a loan from.
With so many factors to be considered when choosing coverage on your life, a life insurance policy should be chosen by design and not by default. While certain life insurance carriers or product may be popular or considered the best, this does not automatically mean that it is suitable for every person. The product should be chosen based on how well they fit a person’s need.
For example, term life products are often recommended for young families due to its affordability. The downside is that it is not permanent and is only in-force for a certain number of years as stated during the application process. Term would not be good for someone who is looking for permanent life insurance coverage especially for estate planning purposes. Instead, you would want to look at permanent life insurance such as whole life or universal life. Let’s look at another scenario. If you wanted life insurance that would allow you to take out cash. You would want to purchase a policy with a cash value account. Life insurance products with a cash value account include Indexed Universal Life Insurance for potential growth in cash value with protection or Variable Universal Life for those willing to take a risk.
Whether you are an agent or a client, it is always important to do your research first and decide what is best for your current situation and future need. Many factors play into deciding the appropriate life insurance policy such as your budget, health, and life goals. How long do you need life insurance protection? Maybe 10-years or for the span of your life. Do you have concerns of estate planning or maybe you have a young family with a 30-year mortgage on your home? Will you be needing long-term care later in life? Asking these questions is a great starting point to help you assess and figure out what life insurance product is suitable for your current and future needs. If you’re not sure where to start, please contact Transglobal today.
