Life Insurance

Should I consider having life insurance?

There are many reasons to own life insurance, and most often we find our clients purchasing life insurance to replace income, and thus protecting a current family lifestyle in the event of death. Just as with long term care planning, clients turn to us for creative solutions to help protect those they love and care about.

Over the years, we’ve helped our clients secure life insurance for many reasons. Often these needs are designed around the idea of leaving something for a spouse or partner, children, grandchildren, or using such monies to fund a charitable giving initiative, or to simply create liquidity as part of an estate plan.

In other situations, business owners have reached out to us for life insurance to fund a cross-purchase buy/sell agreement for a closely held business, and there are other instances where we’ve helped companies secure life insurance on key members of their management team.

There are many types of life insurance, and below you’ll find a brief overview of the most commonly utilized forms:

Term Life
Term life insurance is just that, protection purchased for a certain period of time and this is the most affordable way to secure protection. Typically, this may be for a period of 10, 20, or 30 years, and we have clients who have purchased term insurance to help fund a certain need, such as paying off a mortgage, to help fund a college education for younger children, or as part of a divorce settlement. Depending upon how your policy is designed, term insurance often has an option to be converted into permanent life insurance, without any additional health exams or underwriting - thus having such a policy is a terrific way of protecting your future insurability.

Guaranteed Universal Life
This type of insurance protects you for your lifetime and does not build any permanent cash value. Such coverage is more costly than term insurance, but less expensive than whole life. A number of insurers offer non-guaranteed policies that only pay a death benefit tied to an anticipated life expectancy – but in general we believe that guaranteed policies that remain in force past age 100 are in the best interests of our clients.

Whole Life
Whole life policies are best defined as a savings account with a death benefit, and over time can build significant capital on a tax free basis while providing an ever increasing death benefit. We have a number of clients who have selected such a solution, as these accumulated monies can be borrowed from your policy, or utilized to help create additional income in retirement. In addition, with most whole life type policies, the insured can choose to pay for a policy over 10 or 20 years, whereby the policy becomes paid up and no future premiums are due.

Second to Die or Survivorship Life
This coverage is essentially based upon the life expectancy of two people, and pays a death benefit upon the passing of the second insured, which would typically be a spouse or domestic partner. Coverage such as this is most commonly utilized to leave a certain amount to children, or grandchildren, for charitable giving, to help fund payment of estate taxes, or to satisfy other financial obligations.

Click here to see an example of what is perhaps the best value in life insurance today.

Guaranteed Issue Life Insurance
These are typically small policies in amounts of $25,000 or less, that are often used to fund final expenses, and do not require any medical underwriting. We have clients who have secured such coverage for a loved one that might be ill, and unable to qualify for other types of life insurance.

In our eyes, what is most important about life insurance, is that there are many different ways to design and fund your protection, and we invite you to call us to discuss your existing policies, or to be resource for placing new life insurance for you.   

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