Have you thought about Life Insurance? Well, if you have a family or own a home you really should at least put some thought into it.  Here are some introductory FAQs and their answers.  Read through it and then give us a call, we would be happy to discuss with you any of your thoughts, explain any unclears, or advice you on what is right for you.

WHY SHOULD I BUY LIFE INSURANCE?

Most financial planners believe it is a cornerstone of any good financial plan.  It can replace your income for remaining dependants.  It can help to cover the costs of final expenses.  It can provide a payable asset to your heirs.  It creates a good source for saving.

HOW MUCH LIFE INSURANCE SHOULD I BUY?

If you have dependants you should buy enough so that it will replace the income you generate for them, and perhaps cover any additional expenses the might occur without you there anymore.

You should also consider replacing any hidden income, i.e. health benefits from your work, or other ‘perks’.

Speaking to a licensed broker will help you figure out just how much you need, because each person’s situation is different.

WHAT TYPE OF INSURANCE IS AVAILABLE TO ME?

There are two of life insurance policies: Term and Permanent

TERM:

Term is available in two forms, level and decreasing, most people buy level.

Level and Decreasing refer to the benefit payable; in a level policy the benefit stays the same over the course of the entire life of the policy.

Term policies can run from yearly renewable to 5, 10, 20, 25 year terms or to term to a specific age (commonly 65)

PERMANENT:

There are four kinds of permanent policies, Whole life, Universal life, Variable life, Variable-Universal life

Whole life – The most common type of permanent life, you pay a specific premium to ensure a specific benefit is paid, it’s also a savings account

Universal life – this is a much more flexible policy, the benefit is increasable and there is a cash value account which gains money based on market interest, and eventually this account can be used to alter or make the premium providing there is enough money in the account.

Variable Life – This policy combines the benefit with a savings account that can be invested into stocks, bonds and money market mutual funds. This can make the policy grow more quickly but adds the market fluctuation risk. Poor market performance might decrease your benefits.

Variable-Universal Life – Combines the features of variable and universal life products. It has the investment risk and reward of variable life and the ability to adjust your premiums and benefits like universal.