Balcos Insurance Community

There is so  much to know about life insurance… it makes it quite appealing to lump it with the tasks you’ll “get to tomorrow.”

But what if you don’t have a tomorrow? Rarely do we get warning in advance about when we’ll pass away – and if you waited just one day too long, your family’s home, finances, education and future are all in peril.

If you’re no longer around to help provide for your family, who takes care of their needs? Your income helps pay for their:

• Home (Rent/Mortgage, Repairs)
• Utilities
• Car
• Food
• Clothing
• Education
• and much more…

Don’t wait until it’s too late. Get life insurance today.

Do I Need Life Insurance?

Life insurance is most important once you have dependents. If you don’t have dependents, you might still consider life insurance. However, it isn’t as critical as once you have others that rely on you. You should start thinking seriously about investing in life insurance when:

• You get married.
• You have children living in your home.
• You have a parent or relative who is dependent on your income.
• You have a loved one who you want to be able to care for, for many years to come.
• Your 401K, retirement plan, or pension aren’t enough to take care of your family in the future.

Dealing with the emotions of losing a loved one can be tough enough on its own – so why make an already difficult situation harder with financial woes? If you have others that count on you, it’s important that you make sure you have a backup plan… for that day where you can’t be there for them anymore.

Life insurance Can be Used for Many Purposes.

• Protecting your loved ones with a continuing income
• Ensuring your funeral costs are covered
• Transferring wealth
• Accumulating cash
• Estate planning
• Achieving estate tax liquidity

The trick is in finding out how much life insurance you need, what type, and for how long. The best way to accomplish this is by using an independent insurance agent - they will be able to shop different companies and get the best coverage and premium available to you for your individual situation.

How Much Life Insurance Do I Need?

This varies quite a bit from person to person. But there are a few important things to take into consideration when thinking about life insurance:

• The earlier you get life insurance, the less you will pay for coverage.
• How big is your family?
• Do your parents or other relatives (now or in the future) depend on your income to help them with living expenses, medical bills, nursing homes, or hospice care?
• Does your spouse work, and if so, will their income increase/decrease in the future?
• How many people are financially dependent on you?
• Do you want your children or grandchildren to go to college? Have you set up a college fund?
• Do you have other income sources?
• How much, if anything, will you receive from Social Security and other such programs?
• Do you have (or is there a possibility of, now or in the future) short-term financial obligations like:
  • Medical costs
  • Funeral expenses
  • Credit card debt
  • Bank loan repayment
• Is your home paid for? How much will a mortgage payoff cost (if you don’t own, how much is rent)?
• How much are utilities? What about home repairs? Home insurance?
• Estate planning.

Typically, it’s suggested that the death benefit (the amount that the insurance company pays out when you die) on your life insurance policy should be approximately six to eight times your annual income.

What Kinds of Life Insurance are There?

There are a few basic types, each with their own variations.

Term Life Insurance

• Policy covers you for a specific period of time - some for as short as one year.
• Insurance pays (unless there are issues with claim) beneficiaries if you die during insured time period.
• Not subject to federal or state income taxes to your beneficiary.
• Term Life Insurance premiums are usually the cheapest.
• Term Life Insurance is cheap to purchase when you’re young, but more expensive to purchase if you buy it when you’re older.
• Though you can usually renew your policies, there is potential for a huge risk if you get sick during the term.
  • If you get sick, you may still be able to buy a policy, but often at startlingly high prices.
  • If you want to continue renewing the policy, be sure to ask your insurance agent what the premium will be.
• When you reach a certain age, some term life insurance policies revoke the right to renew. Be sure to ask your insurance agent about this.

There are two types of Term Life to know about:

• Yearly Renewable Term Life Insurance
  • Coverage for a longer term (20 years, for instance)
  • Costs of policy are spread out over time
  • No big increases in annual premium
• Convertible Term Life Insurance
  • Life Insurance is renewable annually
  • Option to convert to a permanent policy is available
  • Typically has lowest cost, and highest death benefit
  • Risk for being dropped or premiums skyrocketing in the event of sickness is higher

Cash-Value Life Insurance

Cash-Value life insurance policies are run differently than term life insurance. They cover you for your whole life, rather than just a part, as in term life insurance. Since purchasers of whole life insurance are guaranteed to take up on their policy eventually, premiums are higher in the beginning so that the funds can be invested. As with term life insurance, there are different variations on Cash-Value life insurance policies.

Whole Life / Ordinary  Life

• Permanent coverage.
• Cost of policy is spread out over your entire (expected) life.
• These policies will accumulate cash value over time – like a life insurance policy with a savings account attached.
• Premiums are set at time of purchase and never change.
• A person’s age and health at time of purchase determines the premium amount.
• As policy accumulates cash value, you may take this cash out or borrow against it.

Universal Life Insurance

• Permanent coverage.
• This flexible life insurance gives you the ability to change your premium or death benefit at any time.
• You can also skip premium payments if you need to, and some policies allow you to invest the cash value of your policy in other high end investments such as mutual funds, etc. in order to build your policy more rapidly.
• Substantial changes to coverage usually require a doctor’s visit and a bill of clean health.
• Universal Life Insurance gives the owner of the policy a great deal of control over the policy.
• Investment grows in a tax deferred status.

Variable Life Insurance

• Permanent coverage.
• Variable Life Insuranec is a combination of Whole & Universal coverage.
• Death benefit is dependent on insurance company’s success with investments.
• You choose how your money is invested (bonds, stocks, or money markets).
• With successful investments, the cash value and death benefit of your policy will increase.
• Most variable life insurance policies won’t let your death benefit drop below a certain amount.
  • For a guaranteed death benefit, you may be charged. Ask before signing anything.

An independent agent will help make sure that you’re with an insurer who has a good chance of being around when you die. Companies are rated A to F (A+, A, A-, B+, B, B-, etc…). An independent agent can help make sure you’re with the right company for you and one that is safer to invest in. And can usually get you the best benefits and premiums available to you. There are  over 2,500 companies in the US selling life insurance – with so many options, it is even more important that you utilize a professional to ensure you get the best insurer for your individual situation.

Life insurance can be the greatest asset you ever give your family.

Don’t delay – call Balcos Insurance today for a free, no-obligation quote.

(877) 783 – 0335

© 2009, Mark S. Balcos.  The reader assumes all responsibilities for his/her own actions in regards to any items discussed in this report.  Adherence to all applicable laws and regulations, federal, state and local, governing the use of any product or service described in this report in the US or any other jurisdiction is the sole responsibility of the reader.  The publisher and author assume no responsibility or liability whatsoever on the behalf of the reader of these materials. The reader is encouraged to consult directly with his/her insurance professional.

Balcos Insurance Community Home |   Balcos Insurance Main Website

Get an Insurance Quote