When you hear the term “life insurance”, you may picture your grandpa’s funeral and your grandma left alone. How will grandma get by on only one pension? Or you may be thinking, ‘ I’m single with no kids - planning for my future is not a priority right now.’
Unfortunately, life insurance is one of those things that's intimidating and stressful and so easy to put off. But, it's also one of those things that people wish they would have done. It's so common to hear, "I wish I would have known" or, "If I knew then what I know now things would be really different"
Have you ever asked yourself:
What did my parents teach me about money and retirement?
Who’s responsible for me when I get old or pass away?
Is it my responsibility?
Is it the government’s responsibility?
Is it my children’s responsibility?
As a parent, I ask myself, “why should my children or anyone else have to pay for my final expenses?” They can but shouldn’t have to. It’s my responsibility to take care of my finances. And, why should I wait?
There are policies out there that can be customized to everyone’s needs. It’s not a cookie-cutter plan to buy online. It’s based on individual needs.
What Are the Different Types of Life Insurance?
Permanent Life Insurance
Permanent life insurance - also known as whole life - is designed primarily to provide a death benefit to your designated beneficiary (the person or trust who will receive the funds)
Permanent life insurance policies can accumulate cash value over time. If the policy is participating (which means dividend-paying**) you can also elect to put those proceeds back into your policy by purchasing additional paid-up insurance.
Additional paid-up insurance increases your policy’s death benefit and cash value. Your policy’s cash value can be used while still living for any reason.*
Term Insurance
Term insurance is a temporary death benefit and is designed to expire as your financial obligations expire. For example, you may get a 15-year term when you have young children in the home and have more expenses such as childcare and sports fees. That way if one spouse were to die unexpectedly like in a car crash the surviving spouse could still maintain the home and pay for the funeral expenses.
There are 10, 15, and 20-year options. Term insurance is also convertible. you can convert some or all of your insurance to permanent coverage at a later date, without providing further proof of insurability.
The bonus of converting term to whole life: if your health changes and you have an active term policy, you can secure permanent coverage that you may have otherwise have been denied. Let’s say years after you initially bought the term you are diagnosed with diabetes or heart disease. A serious illness can most likely make it impossible to get life insurance. But if you already have Term Insurance in place you can convert it to whole life.
What You Didn’t Know About Insurance
You don’t have to pick just one type of insurance. You can have combined products and have more than one. In fact, many people do.
When you apply for life insurance your current health gets evaluated. The ratings of your health determine how affordable your payments are. It’s important to work with your qualified adviser and understand which options are available for your needs and wants.
Should I Wait Until I’m Closer to Retirement to Worry About Life Insurance?
One thing to consider is that most employee retirement plans and insurance protection do not travel with you. When was the last time you requested a benefits summary from your place of work?
It’s unfortunate how common it is for people to work somewhere for a long time and not know with certainty of what life, health, and retirement benefits they have.
Research is key and so is talking with an expert who can explain the fine print and insurance laws.
How to mix and match policies to maximize coverage. It can be as simple as combining a term life with a whole life strategy. This will take care of needs today and help protect your future.
100% of people will die-- eventually. It’s stating the obvious right, so why not insure your life?
Do you want to just cover final expenses, mortgage, and income protection?
Maybe your needs require a plan for legacy, inheritance, and estate tax needs?
Insurance is important because you and your family are important.
Reach out to Young Tran to learn about your options and set up a plan today.
*some taxes may apply
** participating policy enables you as a policyholder to share the profits of the insurance company. These profits are shared in the form of bonuses or dividends. ... In non-participating policies, the profits are not shared and no dividends are paid to the policyholders.