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Wednesday, September 14, 2016

Who Should Get Life Insurance?

September is Life Insurance Awareness month, and I chose this day, the last day of September, to write this blog.  

You might be asking yourself if life insurance is really necessary for you.  No one really likes to think about life insurance.  And that's perfectly understandable.  But it is even less pleasant to think about what can happen to your loved ones if you don't have life insurance.  The truth of the matter is that life insurance offers a number of benefits that you may not have previously considered. 


Some of these benefits include:

Replacing the income (after the death of a wage earner) that a family will need to survive

Paying off loans (including mortgages, personal or business debts)

The creation of a fund for the education of children in the family

Coverage of final expenses, such as funeral costs/taxes


The creation of an emergency fund which can serve to support family members in times of crisis 

Life insurance can be just the thing you need to ensure security and comfort for your family.  As your agent, we don't intend to sell you something you can't afford or that won't be beneficial to you.  We just want to present you with your best options-the decision to buy is up to you!

I have made a few points to help guide you to answer the burning question "Do I really need life insurance."

Types of Life Insurance

Generally, there are 2 types of life insurance policies...Term Insurance and Whole Life (or Permanent) Insurance.  

Term insurance is similar to renting an apartment.  You pay into it, and when the contract time is expired, you can renew it at a different rate or rent/purchase a different one at that time.  

Whole Life (Permanent) Insurance is like owning a house.  You pay for it, and it is yours until you no longer make payments or sell (surrender) it.  In the meantime, over a period of time, you can accumulate an investment on it to use toward other life circumstances.

Pekin Insurance has a new product called Transitional Life Insurance.  This policy combines both, term and whole life together.  You choose the benefit amount and the Term of the policy that you make payments on (10, 20, 30 years or term to age 65).  Once the term is up, the policy benefit drops down to a specified amount, and you carry that benefit for life.  The policy continues to accumulate a cash value.  This policy is ideal for those who have purchased a house and want more coverage until they are debt free, but would still like final expenses for their loved ones.

Plan Ahead

I was fortunate enough to grow up with my father, Dale Fair...president of DF Insurance Agency, educating me on the importance of insurance.  So, I was able to place a whole life policy at a young age, that made it very affordable then and now.

One of the main purposes for life insurance is to have final expense costs and debt  covered in the instance that we leave this world before our loved ones.  We don't want them to carry the burden of debt/expenses we leave behind.  

By planning your financial goals, you are likely decide if a Term Policy, Permanent Policy or a Transitional policy would be a best fit for you!  

The younger you are the better the rates.  So, parents can start a life policy on their children as babies, and by the time they are off to college, they can be done paying for their life insurance, and their children will have that coverage for them for their lifetime.

In an ideal situation, you may just need life insurance for a certain amount of time...you know until your house is paid off, you become debt free, you have a savings, retirement and final expense costs in a savings.  Then, at that point, you may not need or want a life policy.  However, life happens, and plans that we strive for doesn't always fall in place the way we planned it.

The most popular response we get when asking about life insurance is, "I have great coverage through work."  That is great!  We are very happy to know that SOMETHING is in place.  However, for most of us, we may lose that job or are forced into an early retirement long before we are debt free with final expense costs are put back into savings.  Unfortunately, most life insurance policies you get through work will terminate when your job does.  At that point, trying to purchase a life policy may be more expensive in your 50s than it would have been in your 30s.

Read up on your employer's life insurance program to see if your life insurance would terminate if you no longer hold a position with the company, or if it is transferable to you.  You can always get an affordable small whole life policy to cover final expenses even if you do have a policy with your employer.

Choose a Policy That Fits Your Needs

It can be difficult deciding which policy may be right for you.  Talk with your insurance agent about your life insurance needs and financial goals.  We are happy to help anyone with any questions.  We will list out different quotes and scenarios to help guide you to the product to fit your needs.  Each person is in a different stage of life with different needs, and we do our best to accommodate to those needs.  Once again, we do not want to sell you something you can not afford or wouldn't need.  

You Already Have Final Expenses Saved?  Great!  How Much Do You Make On The Savings?

You did a great job saving up for your final expenses, and you have $15,000 sitting in savings.  Did you know that you can take that $15,000 and invest it in a life policy and accumulate cash value?  For example, if a 64 year old healthy female decides to get a whole life policy with the $15,000 that she has in savings.  That $15,000 would get her a whole life policy with a $29,849 death benefit...AND...by the end of the 7th year, her $15,000 would turn in to $16,158!  *this is a quote, and subject to change 

Life Insurance Is More Affordable Than You Think

I did a few different quotes to illustrate how affordable life insurance is!

AGE 64                     MALE                      FEMALE
$15k whole life                $51.12/mo                    $42.46/mo
$50k 15year Term           $78.43/mo                    $52.16/mo

AGE 20                     MALE                      FEMALE
$25k whole life                $15.44/mo                    $13.68/mo
$50k Term to 65              $12.75/mo                    $11.22/mo
Transitional Life               $17.70/mo                    $15.54/mo
to age 65 
$60k (age 20-65)
-$10k(age 65 on)
                                   

Life Insurance Is Not Just For You...

It is for the loved ones you leave behind.  It can give you a peace of mind knowing that you did all that you could do to lift the financial burden during a grieving time.

I hope that you were able to learn more about life insurance possibilities!  Please feel free to email us at:  customerservice@dfagency.com
call us at:  317-887-9886
for an insurance review, questions, quotes or advice...we would love to hear from you!