Life Insurance
Life Insurance Definition – A contract in which someone pays a premium, in exchange for a specified death benefit payment, upon death.
- Insurance is to protect against unknown risk
- Investing is the business of increasing ones assets
- Life insurance should never be sold as an investment
Life insurance is difficult to understand, policies today have many moving parts. However, at the end of the day there are only two types.
Term |
Vs. |
Permanent (your entire life) |
Term insurance contracts have the following features:
What is the point of Term Life Insurance?
What costs are associated with Term Life Insurance?
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Permanent insurance is like having a term policy for your entire life with a built in savings account that accumulates cash value.
What is the point of Permanent Life Insurance?
What costs are associated with Permanent Life Insurance?
1. Variable Universal Life – 2nd Least Expensive
2. Universal Life – 3rd Least Expensive
3. Whole Life – Most Expensive
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How Much Life Insurance Do You Need?
To estimate your life insurance needs, complete the worksheet below:
Expenses:
Mortgage Debt +$___________ How much left to pay off home
Other Debt +$___________ Loans
Other Debt +$___________ Credit Cards
Other Debt +$___________ Vehicle
Other Debt +$___________ Vehicle
Future Education Costs +$___________ If you die and would like your child(s) college paid
Replacement Income +$___________ If you die how much would your loved ones require
Total Cash Needed: =____________ Total All of the Above
Available Assets: -$____________ Cash, savings or checking account, existing life insurance (work), retirement funds, etc...
Total Life
Insurance Needed =$____________ (Total Cash needed) minus (available Assets)