Since 1993 I have helped hundreds and hundreds of Arizona clients with their life insurance. We have written term life insurance, whole life insurance and universal life insurance. There are a number of different types of life insurance a person can choose.
In today’s electronic age you can log onto the internet and buy just about anything and that includes life insurance. I highly advise against buying insurance over the internet. Consumers focus on premium. Yet, if you understand life insurance and how the various products work short term and long term you might make different choices after sitting down with a life insurance agent.
Some life insurance premiums are rock bottom cheap at your current age. But in 20 years their rates skyrocket. What happens then? What are your choices then? See, it’s those types of scenarios and questions that you need to investigate.
Life insurance is one of those purchases that can backfire on you later in life if you make the wrong choice. Don’t make the wrong choice. Get advice from a life insurance agent before you buy.
Which life insurance policy is the best?
Which policy is best depends on who you ask. In reality, it depends on your specific situation and specific needs. In our household we actually own all three types of life insurance policies. Whole life insurance is the best type of policy but it can get expensive as you get older. That’s why the life insurance on my kids is whole life. Whereas, I personally own universal life and term life insurance.
Owning a combination of universal life insurance and term life insurance gives me a combination of lifetime coverage and cheaper, short term coverage since I still am raising kids and my budget gets stretched.
When buying life insurance what should you consider?
Here are some helpful questions to ask yourself when considering buying life insurance.
Question 1) How long will I need life insurance?
Most people will answer this question by saying, “I need it the day I die.” However, we do not exactly know when we will die. So the obvious answer is you need whole life or universal life insurance since both plans will still be active until the day you die, as long as you pay your premiums. Your agent can help explain the difference between whole life and universal life but for anyone a bit older the universal life insurance plan is the lower cost.
Question 2) How much life insurance do I need?
This answer depends on what you want to accomplish. Do you want to pay off your home, credit cards and vehicle loans, provide money to cover funeral costs, leave money to pay for kids college, leave money for a spouse to cover unexpected medical expenses or home repairs and what about money to assist your spouse set money aside for the future. Remember, you are gone and so is your income.
Also, you can never predict your future health. If you become sick or injured and it has a likelihood to affect your longevity you will be hard pressed to buy more life insurance. Our advice is to buy as much as you can afford because you never know what tomorrow brings.
Question 3) How much life insurance can I afford?
Term insurance is cheaper in the short term. Just keep in mind that term life insurance premiums increase as you age. Term insurance is designed to price you out as you near retirement. Too often, we see people who bought term life insurance years ago and simply forgot to check into changing into a permanent plan (whole life or universal life). At retirement, your term life insurance will be very costly and the coverage will simply expire at a set age. When that happens, you will have no life insurance inforce. Don’t be caught unaware.
We highly recommend everyone consider buying whole life or universal life insurance before they retire, preferably in your 40’s or 50’s or earlier if possible. These plans lock in your premium at whatever age you are at the time for the rest of your life.
I am a big proponent of buying permanent whole life insurance or universal life insurance on children. We do not expect our children to die young so that is not the purpose of the insurance on kids. The purpose is to lock in a rate at whatever age they are today FOR THE REST OF THEIR LIVES. Imagine your children as adults one day paying life insurance rates that were based on a child’s age. They can pay a child’s rate for the rest of their adult life until they die.
Of course as an Arizona life insurance agent you would expect us to recommend life insurance. However, we have seen how death changes a family. The financial impact is often the one area that hits a family where they did not expect or plan adequate for. We all hope to live a long life; however, if you die with a family and financial obligations those burdens fall to those who are still alive to carry on.
Life insurance gives those who live more options, more choices and less burden to face the future. It is our obligation to plan for our family’s future and life insurance is one of the ways we can do that.
If interested in receiving a life insurance quote please contact me for a free, quick quote.
Gary Brown, Agent/Owner