You Many Want to Consider Getting Life Insurance
When it comes to the topic of Life Insurance, people have mixed reactions. Some people don’t want to talk about it because it deals with the sensitive subject of death and the loss of loved ones. Others shy away from talking about it because they have images of a slick, hard-charging salesman who just may talk them into buying something they may not want or understand.
To put your mind at ease, this article will not dwell on either. What the article intends to portend is that Life Insurance is an essential part of financial planning. To begin, it may be helpful to set some definitions and parameters for the discussion.
The purpose of Life Insurance is to provide for your family, loved ones or the things you care about when you are not around any longer. So, if you have no family or loved ones or things you care about, then Life Insurance is not for you. And, if you are in the minority of people who are wealthy and can write a check for any circumstance, disaster, or unexpected event, then you may not need Life Insurance, either. Yet, for the rest of the 99% of us, we will consider the merits of purchasing Life Insurance.
Merit #1: Would Your Family Miss Your Income if You Were Gone?
In today’s American culture, the answer is likely ‘yes.’ The majority of American families that work, have two earners in the household. And, in typical American style, we spend up to the amount of Income we make. Thus, if one of the two Incomes was gone, debt obligations and lifestyle choices would bury (no pun intended) the remaining party’s limited Income.
Merit #2: To Provide for Your Children’s or Grandchildren’s Education Needs.
Many policy holders have built into their plan an amount of money to be set aside for their heirs upon their demise. And, for some policy holders, their heirs can benefit even if the policy holder is not gone. In the case of a “Cash Value Policy”, a.k.a. Whole Life Policy, countless policy holders have used this vehicle to save for the education needs of their children or grandchildren. Why would someone save for such a goal is a Life Policy? One reason is that the Interest Rate and Cash Value is guaranteed to not only earn a competitive interest rate, but to be there when they need it.
Merit #3: Estate Planning Purposes
Although changes in the tax law have increased Estate Taxes (a.k.a the “Death Tax”), Life insurance has long been used by the wealthy to pay Estate Taxes. If, for instance, a person’s estate is $20 million, the Estate Tax would be 50%, or $10 million. But, if a person had a Life Insurance policy in the amount of $10 million, the proceeds could pay the Estate Tax upon death. And, instead of liquidating half of the estate, the person would pay a fraction of that for annual Life Insurance premiums, thus leveraging their assets.
Merit #4: The proceeds of the policy is tax free.
Very few Investments, or Savings Accounts, are free of Income Taxes. So, if you don’t like paying taxes on your hard-earned money, this is the way to go. Of course, you wouldn’t have to worry about dealing with it because you won’t be around.
Merit #5: Most people won’t have access to that kind of money at one single point in their lives.
And, let’s face it, the odds of collecting on a Life Insurance policy is 100% – which is a whole lot better than the odds of winning the lottery, or striking oil on your property, or investing in that one “sure-thing” stock that will be the next Amazon or Google.
As you can see, all five of these truly do have merit (again, pun intended!). If your concerns still exist regarding high pressured Insurance Salesmen, feel free to give Jim Bivona of BIVONA INSURANCE a call at
623-256-1000. An Independent Insurance Agent, Jim will be able to help you find the Policy that will serve your needs best, regardless which of the Merits most appeal to you!