Life Insurance

How much life insurance do I need?
The best way to answer that is for you to think about who depends on you and for what. Your family may count on you for such things as house payments, education expenses and a certain lifestyle. The right amount of life insurance (it might be term life insurance, universal life insurance, whole life insurance or a combination) can help guarantee all these things for your family in the event of your untimely death.

Why do you need life insurance?
Life insurance can help:

• Replace income your family would need to maintain their standard of living.
• Pay off your mortgage loan or other personal and business debts. If you rent your home, it can create a fund for future rent payment.
• Create an education fund for your children.
• Pay final expenses, such as funeral costs, credit-card debt and taxes.
• Create a family emergency fund.
• Protect future insurability – no matter what your future health, your policy will stay in force as long as premiums are paid.
• Build cash values on a tax-favored basis – in permanent life insurance plans. When the policy is properly funded, these cash values can be borrowed through policy loans.

What kind of life insurance do you need?
Before you begin to consider that question, arm yourself with some knowledge about your choices. Below you can compare the three basic life insurance categories:

Term Life Insurance: Used for short-term needs or when funds are limited. The advantage of Term Life insurance is that it covers your insurance needs at an economical rate.
Here are some key features of a Term Life Insurance Policy:

• Provides Income-Tax Free death benefit
• Insures your life for a set period of time.
• Level premiums are only for the chosen period of coverage.
• You can convert to a permanent plan.
• Term insurance does not accumulate cash values.

Universal Life Insurance: Long-term needs. The advantage of Universal Life Insurance is that a flexible policy can evolve with your changing financial situation.
Here are some key features of a Universal Life Insurance Policy:

• Provides Income-Tax Free death benefit
• You can choose to make level premiums.
• When required premiums are paid, the policy stays in force.
• Provides Lifetime Coverage
• There is also a guaranteed minimum interest rate.

Whole Life Insurance: Much like Universal Life insurance, this is best suited for long term needs. The advantage of a Whole Life insurance policy is that you get Level premiums and level death benefit with lifetime coverage.
Here are some key features of a Whole Life Insurance Policy:

• Provides Income-Tax Free death benefit
• When required premiums are paid, the policy stays in force.
• Premiums are level for the life of the policy.
• Lifetime coverage.
• Cash values accumulate at a guaranteed rate.

How much life insurance do you need?
In other words, how much coverage will it take to meet the needs of your family in the event of your untimely death? You need to assess several factors regarding your family situation (possible mortgage loan, education plans and income replacement to name a few) before you can arrive at an amount. Contact Rich McDaniel to help you make sure you cover all your bases. Consultations are pressure free with no obligations.

When should you buy life insurance?
The easy answer to that question is to buy it now. Life insurance premiums are based on age so your cost will never be lower than it is today. And, you want to be sure the coverage is in place when it’s needed.