“I have enough life insurance to bury me.”
That’s what most people tell me. Many of my customers can talk easily about stocks, bonds, and real estate, but they often don’t understand the many usages for life insurance besides a death benefit. In my experience, these benefits are usually discovered only after it’s too late.|
Not just a death benefit
Here are some other statements I’ve heard many times in 26 years in the insurance industry:
· “If you can cover the funeral cost, life insurance isn’t needed.”
· “Life insurance only benefits me when I’m dead.”
· “Our investments make us self-insured.”
These are narrow perspectives on life insurance, and they come from people from all backgrounds. Why has such an important financial product like life insurance become stereotyped into just one benefit?
Living benefits
Today, life insurance policies provide financial protection and flexibility for the deceased and the living. Some great reasons to purchase life insurance include:
· Leaving an inheritance to loved ones.
· Paying off debt.
· Replacing lost wages.
· Paying down a mortgage.
· Supplementing income.
Some examples of insurance policies:
· A burial policy provides coverage only for proper burial and funeral expenses.
· Typically, whole life policies extend to age 100, and they often come with extra features.
· Term life products are relatively lower in cost than whole life, but it is temporary insurance, which is set for a specific period of time and has little or no cash value.
· With universal life or variable life products, you earn interest linked to the performance of a market index, and they tend to be flexible with many moving parts.
You may already know about some or all these products, but you might think they each require the death of someone to activate. However, many of these products can be packaged creatively to provide added protection of living benefits through various optional riders.
· Some products allow for payment to trigger upon developing a critical or terminal illness of the insured, a benefit to in-home or outpatient care.
· Some riders allow owners to give or take from the cash value of the product as a loan, offering income potential.
· Other policies include coverage toward accidental death and dismemberment, which helps the insured in the case of loss of limb or vision.
· Certain policies can be used to start an immediate or predetermined stream of income at a certain age. One method growing in recent popularity is accessing the cash value in a life insurance policy through policy loans for college savings.
Products to fit you for life
Best of all, life products can be customized to fit each client’s individual needs. Consumers today have more power and knowledge than ever regarding insurance, but agents can be extremely helpful for putting together custom strategies. The best way to find out what’s possible is by scheduling a meeting with your insurance agent.
If you think insurance is only valuable in death, think again. You have many options available to properly protect your estate while you’re still living. As the common saying goes, “You don’t buy life insurance because you are going to die, but because those you love are going to live.”
