David A Klein LUTCF – Professional Insurance Services –
I would define Life Insurance as follows: THE IMMEDIATE CREATION OF LIQUID CASH WHEN NEEDED THE MOST.
The idea of Life Insurance has been with us for many years, yet few understand the types and its many uses. We commonly think of making sure our families are taken care of if we pass prematurely. This is the most common reason for the purchase of life insurance. We want to make sure our mortgage can be paid off, our children can go to college, and our families are financially stable. Yet there are a number of other ways we might have need. This will be addressed in a future article.
How much, and what type, an excellent and timely question. In the simplest form, we have a saying, THE BEST INSURANCE PORTFOLIO IS WHAT YOU NEED, AND WHAT YOU CAN AFFORD. There are two basics types of life insurance, TERM, and PERMANENT. The question of course, is what is best for you.
Term is, as the name implies, temporary, usually written for from 10 to 30 years, and usually has a level death benefit for the entire term of the contract. Permanent is just that, good until you pass. Term is the most common life insurance written. Under permanent, there are two basic products, UNIVERSAL LIFE, and WHOLE LIFE. Universal Life is more common, these contracts are designed to be more cost effective than traditional whole life, while providing the permanent need. They can also be designed to build additional cash value if desired. We most commonly see Whole Life used in GUARANTEED ISSUE plans. Another subject for the future.
What is best for you and your family, this is totally subjective, as needs vary. I recommend discussing this internally, and then sharing with a qualified insurance professional or financial planner.
In our next article we are going to move outside of the family, and discuss other places where life insurance may be used.
David A Klein LUTCF – Professional Insurance Services
wwwKleinInsuranceServices.com email: daklein3@gmail.com
760.724.3147 or 760.594.4657 • CA License- 0608245
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