Fusion of Life & Money Love Redefined | Love Redefined |
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When it all boils down to it, life insurance is about protecting those that you love. That protection comes by providing replacement income if you were to ever decease unexpectantly. Life insurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the policy owner’s death. In return the policy owner or policy payer agrees to pay a premium at regular intervals. There are various schools of thought regarding how much to buy and what type that we will cover later, but first and foremost realize that the good majority of people NEED it. Who Needs Life Insurance? Because life insurance is meant to replace income it is essential for those that have people that depend on them financially to carry it. This means husbands, wives and parents. It also includes business owners that are involved in any business partnerships. If you are single, without any dependents your need for life insurance is not as great, but keep in mind that buying life insurance at a younger age is probably a good investment. This is because many people at some point will marry and/or have children and life insurance cost is determined by age and health. How Much?
For the primary breadwinner, 5-10 times your current annual income is a good rule of thumb. So if you currently make $50,000 per year you should have between $250,000-$500,000 of life insurance. If you have a substantial amount of debt, err on the higher end of the scale. I know it sounds like a lot of money, but the USDA estimates that on the low end families can expect to spend $135,000 per child from birth to age 18. This does NOT include the cost of college. What Type?
Life insurance falls into two categories. Temporary (Term) insurance and Permanent insurance. Term provides life insurance for a specified term of years for a specified premium. Term is generally considered “pure” insurance because the premiums paid go toward the coverage and nothing else. For example, a 15 Year, $150,000 policy would provide life insurance protection for 15 years and if the insured were to decease in that time period the insurance company would pay the beneficiaries $150,000. Permanent life insurance is insurance that remains in force until the policy pays out, usually when the insured deceases. Permanent insurance also builds cash value. There are two main types of Permanent insurance, Whole life and Universal Life. The elders have always told me that what you DO speaks louder than what you SAY. Maybe it’s time your love for someone spoke up. If you have any questions on life insurance don’t hesitate to contact us at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it If you would like additional information we recommend you visit http://www.life-line.org/
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