The Life Insurance Buyers Guide

Life insurance is a topic that is either overlooked or avoided—mainly because it brings to light the inevitable truth that everyone, regardless of age or gender, will pass away.  Granted some people will be prepared; while others will be shocked at the loss of their loved ones—one thing you can do to ease the financial impact that death brings, is to prepare in advance and think about life insurance.  While it is never an easy subject to bring about, the purchase of life insurance will allow your friends and family to focus on making themselves whole after such a devastating loss.  Aside from the wake and funeral, there is often some debt to be repaid when a significant other passes away, and family members are often saddled with that debt.  Life Insurance solves those problems, and gives those burdened with the loss of their loved ones the financial means to take care of all debt and focus on other areas of their lives without the worry of debt.  While this is a viable solution, people often have no idea where to start, and how to determine what coverage would be best for them.

There are many different types of life insurance, but for the sake of ease of use I’ll boil it down and make it as simple as possible.  Life insurance is generally divided into two categories; Term Insurance and Whole Life Insurance.  Term insurance is just as it sounds—Insurance for a specified amount of time, or number of years.  This option is undoubtedly the least expensive option, as you are only insuring yourself for a specific amount of time, as opposed to your entire life.  For example: someone can insure themselves up to a thirty year term-period.  Which means their insurance would cease to exist after the thirty years, but you can specify the length of coverage from 1 year all the way up to thirty years.  (This type of insurance is mostly used for people that are insuring themselves to cover their loved ones in case something was to happen to them until retirement.  (Essentially, folks who choose this type of insurance do not want to leave their loved ones with a significant amount of debt, and gives their loved ones money to take care of those debts)

Conversely, there is also Whole Life Insurance—which is fairly self-explanatory, as it insures someone for their entire lives.  This type of insurance is the most expensive option for the simple reason that the coverage does not end, and the policy will eventually pay-out the claim of the amount insured.  This type of insurance is often used as a savings vehicle to transfer wealth from person to person without incurring tax penalties for the policy amount.  This type of insurance builds cash value, as well as paying out a face amount in the event of someone’s death.  (The term face-value, or face amount refers to the amount of insurance on a specific individual.)

Regardless of the type of insurance that is purchased, you must put serious thought into how much insurance is needed for your specific situation.  This can be a difficult thing to do because as you must take into account many different factors, such as what you can afford, your current debt, investments and overall goals that you’d like to achieve by purchasing life insurance. (Just because a certain amount works for one family, does not mean it will work for another, as every situation is different) No matter what you decide to purchase, make sure that you speak to a licensed life insurance producer, or a financial advisor—life insurance is a very serious decision that will impact both yourself and your loved ones for the remainder of their lives.

Many people have a desire to research topics in more detail, or get a look at what your specific situation is like; you can refer to the link below.  This is a link to a book on life insurance information and allows people to get a full-scale view as to their life insurance needs.

http://www.mwlb.com/lifeessentials.pdf