Life Insurance Insurance Advisor Risk Managment

Most financial advisors would agree that life insurance is an integral part of your family’s financial plan.  But determining the right type and amount of coverage can be difficult.

Hi my name is Andrew Rincon, and I’m here to help you make the right decision for you and your family’s future.  Today we are going to cover a few questions that most people have about life insurance.

The first question is, Do I need life insurance?  

The second question is, how do I choose the appropriate type of coverage?

The last question is, which insurance company should I choose to do business with?

If you are  reading this blog you may have already done some research on your own about life insurance, but our goal is that after this blog is over, you will have the information you need to make an informed decision for you and your family.

Now let’s get to our first question that we are going to answer in today, and that is “do I need life insurance”?  The easiest way to answer that question is by answering another question.  Would someone suffer financially if you were to pass away?  If the answer is yes, then you need life insurance.  The most immediate need for life insurance in the event of a tragedy could be just to replace income in your household.  Or to pay for final expenses.  Life insurance can also be used to pay down the mortgage, or to provide income for your children’s college education.  Our agency provides a free, life insurance calculator to help you know the exact amount of insurance your family will need if something was to happen to you.  Stick around till the end of this blog and I’ll provide you the information on how to get access to our free life insurance calculator.

So now we know whether or not you need life insurance.  The next question is “how do I choose the appropriate type of coverage?”  

This is a very important question to ask, because life insurance policies are long term contracts, so you want to make sure you are taking out the right policy for you.

Basically there are two forms of life insurance, term and permanent.  Now permanent insurance can come in many shapes or sizes but for the sake of time we will consider all permanent policies the same.

So the simple question to ask yourself when trying to decide between term and permanent life insurance is “what do I need the insurance for?”  If you need the insurance for a temporary need like paying off the mortgage on your house, or making sure there are enough funds for your children’s education, then perhaps term insurance is a good fit, because you can choose a specific period of time to have the coverage for, anywhere from 1 year to 30 years.  Alternatively If the need for life insurance is more permanent, like funding your final burial expenses, or ensuring there is income for the surviving spouse to maintain their lifestyle, than Permanent insurance makes a lot more sense.

Cost can of course be a deciding factor when it comes to choosing between term and permanent insurance.  Term insurance is is going to be the less costly option.  Mainly because you are purely paying for the life insurance death benefit.  Permanent insurance has other built in or value added benefits, which can increase the amount of premium you will pay each year.  Permanent insurance differs from term insurance because it typically builds cash within the policy that the policyholder can access tax free throughout the life of the policy.  Permanent insurance is a great tool to accumulate cash with tax advantages, while also covering your families life insurance needs.

So when deciding which type of insurance is right for you, ask yourself these questions “what goals am I trying to accomplish with this insurance” and “how much can I comfortably set aside on a monthly basis to accomplish these goals”.  If your goal is to purely cover a temporary need then perhaps term insurance is the right fit.  Alternatively if you are looking for alternative strategies to not only protect your family in the event that something was to happen to you, but to accumulate tax free dollars to supplement your retirement income, than permanent insurance may be a better fit for you.

The best way to choose between a term or permanent plan, is to consult an insurance advisor that you know and trust.  They can help guide you through the decision making process and explain all your options in more detail.

Now the last question that we are going to answer today is “which insurance company should I choose to do business with?”

There are thousands of insurance companies to choose from, just within the US, so how do you know which company to go with?  Well the answer has to do with something we brought up earlier in this conversation.  Remember when we mentioned how insurance policies are long term contracts?  Sometimes lasting 50 years or more.  If you were to take out a policy with an insurance company, wouldn’t you want to make sure that the insurance company would be there in 50 years to pay out the claim?  

That’s why it’s important to choose an insurance company that has a long history in the industry and one that has a strong rating by either A.M Best or other similar rating agencies.  I recommend an insurance company that has at least an A rating or better.  Choosing a company that has least a century or more in the industry, and that is very financially sound, according to a respected rating agency, will help insure that when it comes time to file a claim, they will be there to pay it out. You can find out Insurance Companies ratings by searching online, or by asking your trusted insurance advisor.

So we have reached the end of this blog, and I hope that I’ve been able to offer some guidance regarding the life insurance decisions you are faced with.

As promised I want to give you access to our FREE Life insurance calculator, which is going to tell you the exact amount of insurance, right down to the penny, that you and your family will need.  Just click the link below and let us know where you would like us to send the Free Life insurance calculator, and we will send it your way immediately. I’ll leave the link up for the next 30 minutes or so, so make sure to click the link right now and will send it to you right away.

Click Here for your Free Life Insurance Calculator Tool

Thank you for taking the time to read this blog.  I commend you for taking the time to learn more about the importance of life insurance, and how it can be a critical tool to protect your family.