Finding Happiness Through Financial Freedom
Jeff Dalverny “The Finance Coach”
Death Insurance… How, Why, and What Kind!!!
Okay, so it is not really death insurance, it’s life insurance. I know, but it really is insuring you on your death. There are so many questions surrounding this as well, how much, what kind, who do I get it from, and how do I know I can trust them. One thing I have found out is that many well-meaning friends and family members who are selling life insurance sell you what you do not need. Why, you ask? The companies do a great job of training them on the benefits of permanent life insurance products because they make them a ton of money. The problem is they are bad investments for the person buying the insurance.
So to help you out here are the 5 things you must know when shopping for Death(Life) Insurance:
- What kind of type? Buy only level term life insurance. You do not need this forever. Your goals should be that in the next 15-20 years there is not a need for an insurance payout. By being out of debt, paying off the house and saving for emergencies and retirement there will not be a need.
- Avoid permanent life insurance. These are the whole life, universal life, and any other insurance that has a cash value associated with it. The problem with these products is you are paying a larger amount monthly for less insurance and then a small portion goes into a bad savings/investment account and the remainder usually the majority goes to pay fees and commissions. Then the real kicker for me is this: I save for all these years and then die, my family gets the death benefit and the insurance company keeps my savings account. What? Yes you read that correctly. They keep all the extra money I was giving them to invest. No thanks, and you should and need to say the same. If you already have one of these products contact your agent and get info on term life insurance and then cancel the other policy once the term is in place and take the cash value to pay off debts, fund your emergency fund, or if that is done do something for yourself.
- How much do we need? I say this is a very personal question that everyone needs to talk about with their spouse (if married). Most people say 8-10 times your income. This is a good general rule of thumb but you need to figure out what you want this to accomplish. Do you want your spouse to never work again, just pay off the house and all debt with a little for recovery time of 6 months to a year, paying for final costs, or do you want to fund your kids college (if you have them). If you are single who are you leaving this to and why? These factors can drastically change the amount of insurance you need.
- Who to buy from? If you have more questions than answers and really want someone to walk you through this process, then you need to find someone with the heart of a teacher. They will be looking out for your best interest not theirs. If you feel comfortable go online and do some research and buy online. If you have questions and need to talk about it first give me a call at 317-858-7270 or send me an email at jeff@thefinancecoach.net
- How do I know I am getting the best? Do shop around. Talk to at least 2-3 insurance companies, get quotes, and have them explain why they use the companies they use and what the ratings mean. Term life insurance is very inexpensive so make sure you check more than one company so you do not get taken advantage of.
Take action and make sure you take care of this. It is one thing you can do to protect your loved ones when you are no longer here to do it. If you are single you still need some life insurance if nothing else to take care of any final expenses. Have a blessed day and thanks for being a part of The Finance Coach.
If you have questions please call Jeff at (317)858-7270 or email him at Jeff@thefinancecoach.net
