Life Insurance… not a conversation people want to have, but is one of the most important things families can have in place.
My husband and I never looked deep into life insurance until I became pregnant with H. It was quite overwhelming at first and it was hard to filter through all the different options and plans out there. So I decided to ask one of my friends from college who has his own company Life and Annuity Solutions to give an easy to understand overview of the different plans and why it is important for families to have life insurance.
How do you find a good life insurance policy?
You can choose between term, whole life, universal life, index life, variable life. What is right for you and your family can be different then what is right for your friends family. Each one of these types polices has a place, but are for different uses.
Think of it like buying groceries, milk, bread, veggies, and steak. All good for you but it depends on what you will be cooking the next few days. Well, life insurance is more of a long term purchase but it should be based on your current needs and goals.
Term life insurance: Is the bulk of polices sold to young couples even before kids are are a thought. Term life insurance is very inexpensive, the price is based on how much coverage you need, current health and length of time you would like the coverage. You pay as you go and can drop the policy at anytime (if your needs change or you find a better policy). Term life insurance usually can be “converted” to any of the other policies detailed below.
Whole life polices: Are more expensive but have some advantages, the premiums never change, and they can gain cash based on how the issuing insurance company does financially, while having a benefit if you pass away. Whole life policies are an excellent option for families and on young children. After roughly 15 years the policy will pay for itself and no more payments will need to be made to the insurance company, it will just remain and continue to build cash. Later the cash value can be accessed and used for any needs such as education, down payment on a house, retirement).
Universal life polices: Have all the benefits of whole life polices, the key difference is the performance of your cash is at a set interest rate. Universal life policies usually have a current interest rate, and a minimum guaranteed interest rate. Also the premiums are flexible. You can change how much cash you are contributing to the cash value part of the policy. Universal life polices are great for estate planning, charitable giving, and safe long-term savings.
Index and variable life: Both act like universal life polices but with higher risk or reward in cash growth. Index and variable life have a benefit if you pass away, and can be used as another investment tool to be used later in life (retirement). Usually if you have maximized your other savings tools (such as 401k) and are looking for another way to continue saving this might be an option. There are some tax advantages to these polices as well.
Be sure to find a good agent who can fully explain the details of these polices and always read the fine print.
What is a real life experience about a family you have helped through the insurance policy process?
Life and Annuity Solutions- “Two years ago I had a client call my office and as soon as she said “Hi Nick” I knew that something was wrong. She went on to tell me that her husband had been diagnosed with stage 4 cancer about 9 months after they got their policies and recently passed away. They were a nice couple that worked hard to make ends meet, but they knew without both incomes their family would be in trouble. This was a first for my career, and life just got real. I was at a loss of what to say, but I knew I could help her access the funds from the policy. It was a tough day, one no one wants to go through. A few weeks later her daughter and her called me to say “Thank you”. They had just received the money and it was a huge help in taking care of them through the future.”
Have you experienced something in your own family dealing with the importance of having life insurance?
Life and Annuity Solutions- “About a year and half ago my brother and sister-in-law started planning on having kids. They were young, and the life insurance agent in me urged them to get some small policies. Shortly after they were insured they were pregnant with my nephew! And soon after my first nephew was born they started on my second nephew! When my SIL went in for her first doctor visit to see if she was pregnant the doctors found a lump in her throat. After the appointment and the reality of what was going on the they called me. First to break the good news (baby number two) and then the bad news (my SIL had thyroid cancer). One of the first questions from my brother was a little shocking “Are our life policies in force, and is this going to effect them?” Life just got even more real because it was my own family. I assured him that the policies were fine and to just stay focused on positive thoughts. As of today my second nephew is here and healthy. My SIL still has a lot to go through but we should know more soon”.
How did you get started in the life insurance industry?
Life and Annuity Solutions- “It all started seven years ago as a sales job. The work was easy, and I love talking to people. Insurance is something that people (especially families) need but did not know a lot about. Over the years I have always treated my clients like family or good friends. I call or email them back quickly and always try to put them into a plan they will be happy with. Part of working with people on this level is providing great service and getting to know them. You hear about their families, political point of view and the ups and downs of life. I have never seen a large number of my clients face to face, but I know the sound of their voice within seconds of picking up the phone”.
You can also email Nick directly email@example.com if you have questions.
Thank you Nick for this guest post life insurance is such an important topic and I think everyone should be informed of their options especially during hard financial times.