Topics on Tap For Life Insurance Points:
- Life Policy Points No One is Talking About
- Maintain Coverage and Lower Rates
- Two Points That are Talked About
- Leave Money for Your Family
- Provide Emergency Funds
- Help Replace Retirement Income
I explain a lot of life insurance points, quite often. And there is a lot of really good stuff going on with life insurance and living benefits, for example. Plus we’re living in a time where the protection and value life insurance delivers should be a no-brainer.
Life Insurance Points No One is Talking About
The age cycle is generally defined as youth, middle age and senior citizens. We all start in the youth stage. No matter who we are, no matter where we’re born. Let’s start there with youth being 18 to 35. There, we’ll use that as the age parameter.
In this phase it is not uncommon for a person to have several jobs. That happens because people change jobs or they lose their job. What’s the point here?Assume John bought an indexed universal life policy at age 18 and is paying the premium. This means he is earning cash value. We all know that because cash value is a feature that has been pounded into our thought theology.
Maintain Coverage and Lower Rates
Maintain coverage and lower rates even if you change jobs or lose employer coverage. What hasn’t been pounded is John is maintaining coverage AND lower rates no matter how many job changes he undergoes. He bought the policy at the earliest adult rate. Even though we call him a youth for this article. And he enjoys the benefits of that low rate for the next 20 to 30 years. He benefits no matter what. Even if he has employer coverage. This type of coverage is almost always term life insurance. And he benefits if he doesn’t have employer coverage. Because he covered himself.
On to the next life insurance points no one talks about.
Protect co-signers and/or family from student debt should anything happen to you. Surprisingly, with all the news about student debt no one mentions the benefit of life insurance and student debt in the same breath.
Co-signers on student loans is a common occurrence. The co-signer is almost always a family member. This means there are two parties involved, right? That means twice as many not good things can happen. First, let’s assume the student dies and doesn’t have either a permanent policy or a term policy. The co-singer stays on the hook for the entire balance of the loan.
Second, let’s assume the co-signer dies and doesn’t have either a permanent policy or a term policy. This means the student stays on the hook for the entire balance of the loan.
Third, the solution. Both parties take out a policy naming the other as the beneficiary. Regardless of which one dies, the beneficiary receives the face amount of the policy. The proceeds probably would be used to pay the loan.
There isn’t any law that says it has to be used for that purpose. However, the beneficiary probably doesn’t want that loan hanging over their head.
Two Life Insurance Points That are Talked About
These are oft mentioned points in the life insurance sales regimen. However they bear repeating because they are important Life insurance has the power to:
- Provide Income to Handle Expenses if Something Happens to You
- And to Help Make Sure Your Family Can Stay in Your/Their Home
The obvious common denominator in both 1 & 2 is the cash value. And the cash from the face amount. I believe they are important so I included them.
Covering college expenses or paying off education debts means you are accessing the cash value of your policy. In another article I wrote about a father sending his son to a technical college. He never entered into a student loan with any of the standard players in that field. Instead, dad used the cash value in his permanent life insurance policy via the loan feature. The loan feature is one powerful tool in the hierarchy of financial instruments. Just another one of the living benefits permanent life insurance policies feature these days.
Leave Money for Your Family
Leave money for your loved ones. Not to mention the money is free from federal income tax. What better gift to give your family if you’re gone? The gift Uncle Sam can’t touch. So even if The CoronaVirus ends up killing you, you’re family gets a tax-free death benefit. And they might think you had CoronaVirus Life Insurance too.
OK, so almost everyone knows about the tax free cash paid to the beneficiary. It’s been beat up enough, or has it? Tell me what other instrument guarantees a tax free death benefit and is blessed by the IRS tax code.Yep, you can’t. Therefore I felt it necessary to beat it up one more time. Set the foundation for your financial plan and future protection.
Nobody thinks about this angle. Most people can’t even articulate the mechanics of creating an emergency fund. If a person buys, for example, an indexed universal life insurance policy. And, above all else, they have built a foundation for a flexible and diverse investment portfolio. Because it is a different kind of life insurance.
Why wouldn’t you want to create the best possible financial plan with future protection built in? I don’t know. What’s your answer?
Provide Emergency Funds
Speaking of an emergency fund, enter the cash value of a life insurance policy. Let’s assume you don’t have 6 months of income set aside as an emergency fund but have a whole life policy. Borrowing or withdrawing from your policy may be able to provide some funds when you need it. Also, if you have investments, and the market is volatile, you won’t have to redeem some or all of them and lose money. Download our free Living Benefits book by >>Clicking Here<<.
Start out by flipping to page 19. The next thing you want to do is pay close attention to that chart. Your cash value can save you from becoming a statistic on the break even grid.
Help Replace Retirement Income
This point has been promoted and flogged so often we tend to overlook it. One day you might be a person relying on Social Security or a pension. And if you made the right choices, life insurance will improve your retirement lifestyle.
One more time, your cash value. Depending on the amount of cash value in your policy, policy loans can supplement your checks for a very long time. I’ve written an article about borrowing from your cash value that bears reading. I won’t go into the mechanics here. Just click on the words policy loans. You’ll be able to read it there.
Probably the largest benefit comes in the form of income replacement that occurs if you pass away. The beneficiary won’t be forced to take any adverse actions. Because he or she finds themselves on the short end of the revenue stream.
Life insurance points no one talks about but should, right? Hopefully this article has stirred the thinking process and gets you to take action.
DISCLAIMER and DISCLOSURE
The articles on this site are for informational purposes only in regards to life insurance policies and annuity contracts. These articles ARE NOT INTENDED to encourage any person to purchase any type of financial services or investment product. But rather to encourage you to ask questions. So, make sure you
ALWAYS CONSULT WITH A LICENSED AND KNOWLEDGEABLE, COMPETENT PROFESSIONAL
You want the agent you consult with to have at least a few years experience. These can be tricky subjects for new agents. And, I never want anyone making an uninformed decision. Because these decisions can be and are LIFE CHANGING. So this means it is very important that your consultant is fully aware of your particular circumstances and/or situations.
Always assume the links you follow, the videos you watch and any forms you fill out can result in me receiving a commission. This is not always the case. But for the purpose of full disclosure you should assume that. Because I am a licensed life and health insurance agent in the State of Nevada. And that’s also why this website is always available.