How do I Know if Life Insurance is Right For Me? It Probably is.
A client visits our office for a ‘get-to-know-you’ meeting. He’s looking for a way to protect his assets and perhaps take advantage of alternatives to conventional banking products. He’s done a bit of research on the Infinite Banking Concept, but he’s not sure if life insurance is the right vehicle for getting to where he wants to go.
We have a great process to help them figure it out. After a few formalities and some basic background questions, we need to ask 2 questions that will tell us whether life insurance is really right for him:
Q 1: “If something happened to you and you couldn’t earn an income, would someone else be negatively affected?”
He nods yes – frowning a bit as he thinks it over.
Q 2: “Do you care?”
“Sorry, say that again?” he asks.
“If that person is negatively affected – do you care? Would you want to provide for them?”
His frown gets deeper and his face goes red. “Of course I want to make sure my family is taken care of if I get sick or if I am not here!”
With those two questions, we can tell if someone is a good fit. If you have people you care about – and they would be negatively affected if something happened to you, then the right life insurance plan can solve a lot of problems.
Who needs life insurance?
There are many reasons to get life insurance – and very often, a single individual will have plenty of good reasons to get it.
Business people. If you own your own business or are a professional with heavy responsibilities, and your organization would be seriously impacted if you aren’t there, then life insurance is right for you. This is called Key Man Insurance and your accountant or lawyer should tell you to get it. If he / she hasn’t, ask us about it.
Anyone with High Income. When it comes to taxes, the worst kind of income to receive is salary. You can also get taxed on capital gains and other kinds of income. Using a whole life dividend-paying insurance policy is a way to create a tax-deferred pool of money that’s accessible when you need it. It can solve the capital gains problem for your family later on.
Homeowners. If you own property and want to ensure that the people who live in your home will be able to cover mortgage payments and will be able to live there after your death, life insurance provides that security guarantee. There are some options for this so make sure you know how mortgage life insurance works before you sign all your mortgage papers at the bank.
Young Families. It is very important for young families to have the insurance discussion with a trusted advisor. You’ve just had a new baby and bought a home – your responsibilities and liabilities have dramatically increased! If anything happens to you know it could be a big disaster for your family. Insurance can help provide some peace of mind that the home gets paid off and your kids will have enough money to grow up and go to a good school if they choose.
Parents who Want to Leave Their Family with Something – without putting them through a giant hassle. A will might get paid out in anywhere from 6 months to two years after probate, depending on where assets lie and whether it is contested. In contrast, an insurance policy is private an the benefit gets paid out tax-free, almost immediately on the death of the policy holder. This provides money quickly, when it’s needed the most.
Why Should Younger People Get Life Insurance Now?
Every year that you get older, the more expensive premiums will be. It’s also easier to get insurance when you are younger because you are younger and healthier – so it’s easier to get insurance. It used to be that most folks would not even think about life or critical illness insurance until they were in their 50s, but we see more and more of our clients realizing that it makes sense to get this insurance coverage earlier, when it’s more affordable and they are able to get it.
Are you thinking about getting life insurance to take care of your family and take advantage of a wide range of benefits to your financial picture? Did your accountant, lawyer, wife, husband or parents tell you to find a good insurance advisor? Contact us today at Safe Pacific Financial and we’re happy to help you.