A very dear friend of mine passed away August 2010. He carried life insurance but not enough to completely give his wife the peace and financial security she truly needs. Fortunately, she has many who love and care about her.
It is inevitable.
So why do we put life insurance as one of the lowest priorities in our lives? For those of us with a spouse and/or children life insurance can help ease the burden that is living after a loved one passes away.
My friend has struggled since the passing of her husband.
I have read that the normal grieving time after a loved one passes is up to 2 years. Imagine how difficult it is for that person to continue showing up at work day after day, paying the bills and managing a tight budget – especially after a loved one dies.
Do your loved ones a favor – buy life insurance. I personally own several life insurance policies and have my wife insured as well as children. Funerals are not free. While not terribly expensive they still can run $10,000 – $25,000. Do you have final expense money sitting around? If not, buy some life insurance.
I have seen the effects up close and encourage you to do the right thing for them.
Are You Prepared to Die?
Someone I know recently had a loss in their family. Unfortunately, the deceased person had no life insurance – none. And that meant no immediate money for those who are left to figure out the funeral to pay for the funeral and other related costs.
Some reports say that a funeral can cost upwards of $10,000 to $25,000. Even if you manage a bare bones (no pun intended) funeral service or are cremated the costs can still be in the thousands.
While we can debate the numbers it is worth noting that with zero life insurance the burden to cover this cost will fall to those who will be burdened with more than losing a loved one – that is, figuring out the finances.
Does anyone really want a legacy that they left loves ones with a financial burden to pay for a funeral that was not their own? It is better to do the most responsible thing and at least have enough life insurance to pay for a funeral. But I understand that if your budget decisions come down to paying rent and buying food or paying for a life insurance plan that is an easy decision for most.
What Life Insurance Plan is Better?
A Whole Life or Universal Life Insurance policy is most often the best type of policy to own. The reason is those policies offer a level premium that will never increase. They also pay an interest rate on your premiums (and sometimes even a dividend) that allows you to accumulate savings. These added benefits can even increase your death benefit over time (Whole Life Insurance).
Other types of life insurance, like term life insurance, increase in premiums in our older years. You see television ads offering cheap, low cost term life insurance but they do not mention how those cheap premiums skyrocket as a person gets into those older years.
Just as you get old enough where death becomes a real thought in our lives the term premiums skyrocket on us. That’s why you should consider the whole life or universal life insurance policy.
If you are curious about how much Arizona life insurance costs, please contact me if you live in Arizona.
The Battle of Life Insurance Policies
With a teetering economy studies are showing a renewed interest in permanent life insurance products, such as whole life insurance. In the past few years sales of Whole Life Insurance has increased by about 22%.
The main driving force is the same reason that kept people from buying Whole Life Insurance – low paying interest rates.
Whole Life Insurance policies typically pay back an interest rate (3-4% is not uncommon) to their policyholder. That small interest gain was often pooh-poohed not many years ago because consumers could put money into the stock market and do better.
Yet, who trusts the stock market today?
Which is better – Whole Life/Universal Life Insurance or Term Insurance?
A whole life insurance policy offers a level premium for the rest of your life, pays a fixed interest rate on your premiums and sometimes a dividend as well that can be used to grow your death benefit. This type of product has been used by some as a way to stash money inside a product that allows for a conservative growth model but without the immediate tax consequences.
In today’s economy earning 3 – 4% on your money would not be an embarrassment – that is what Whole Life can do
Universal Life Insurance also offers a premium that is level as long as you pay your premiums. However, UL policies do not pay interest or dividends. The only advantage they offer – their premiums are usually much lower than Whole Life Insurance premiums.
Term life insurance premiums are often low, especially if you are younger. But the eventually go up and up and up. If you want life insurance well into your elder years you need to escape the trap of cheap term life insurance and find yourself a whole life or universal life insurance plan that fits your needs.
According to a LIMRA report whole life insurance premiums increased 10% in the first quarter of 2010.
Time to think Arizona Life Insurance!
Don’t you love it when industries can manage to nominate a cause to something that generates business for themselves?
It is ironic. However, I believe FIRMLY in owning life insurance and recommend you have it as well, regardless if you are married or single, short or tall, athletic or geek, rich or poor. In my humble opinion – everyone should own some life insurance.
Because everyone dies and dying is not free.
According a recent study:
83% of Americans believe most people need life insurance but only 65% of those interviewed believed THEY needed it and only 59% actually own life insurance.
1/3 of people in a recent survey believe they need more life insurance than they currently own and 28% wish their spouse/partner had more. Leaving loved ones without a financial burden of paying for a funeral is NOT the biggest reason people own life insurance.
Many consumers today are having a harder time putting monies into a permanent life insurance plan. Whole Life and Universal Life are better policies than Term Life Insurance but they cost more. Families are having to make budget decisions in ways they have not in while.
But regardless whether you choose a term life insurance plan or a permanent life insurance policy – your family is better off than buying neither.
If you are curious about whole life insurance, please contact me.