Insurance During Life, or Life After Insurance?

Retirement, Income, Tax & Estate Planning.

Insurance During Life, or Life After Insurance?

May 3, 2018 Long Term Care Newsletter 0

Few people enjoy a conversation about life insurance, yet it can solve a host of concerns for folks. Life insurance can be an option for legacy planning, caring for special needs children and grandchildren, helping pay for long term care, or spousal income replacement.

Here are some important things to consider as you work through your life insurance decision-making process:

  1. Life insurance is often a great example of “you get what you pay for”. Always check a policy’s terms, conditions, and exclusions before pulling the trigger on purchasing a policy. Not all policies are created equal, and just because one policy is the cheapest… or advertised heavily on TV… doesn’t necessarily make it the “best”.
  2. Term or Permanent Insurance? Term policies… those that will expire after a set number of years… can be great for younger adults as they’re usually the cheapest way to purchase death benefit coverage. If you are considering using life insurance for estate planning or as a wealth-building vehicle, a permanent policy probably makes more sense. Fully understanding your needs and wants is critical to finding the right policy for you.
  3. Be sure to let your heirs know about any life insurance policies you own. A not-so-small number of policies go unclaimed each year because the heirs didn’t know about them.
  4. Be sure to periodically review your beneficiary designations. Are they all up to date? This will avoid any possibility of the policy going to the wrong people or into your taxable estate (due to lack of a valid beneficiary) rather than going tax-free directly to your beneficiaries.
  5. If you know you need coverage, it’s always better to buy it sooner than later. Not only do rates increase as you get older, but your chances of becoming sick increase the longer you wait.

There are lots of things to consider when determining which life insurance is right for you… much more than price and death benefit. You should consider your age, your family, your and their financial statuses, and your health. You’ll also have to decide if you need permanent or term coverage, and you’ll need to figure out your long-term care plans. Talking with a professional can help you to understand your options and pick the plan that’s right for you. Whether you’re just starting down that road or you’re narrowing down your options, we’re always here if you’d like to chat about your coverage options and whether life insurance makes sense for you.