M14: Life Insurance

• Many financial experts consider life insurance to be the cornerstone of sound financial planning. If you have financial responsibilities, life insurance could be worth

  considering at any age. However, life insurance tends to be cheaper when you’re younger, as your premiums are calculated on the basis of your age and health, among

  other factors. Aside from age factors, you may want to consider life insurance during particular periods in your life when other people depend on you financially, whethert hat’s a partner, your children, elderly parents or a dependent family member.
• So, is it worth having life insurance? Every household has different needs, but if you want to help provide for your family at a difficult time, life insurance really could be worth it.
• a contract between you and an insurance company.

  Life insurance
• Essentially, in exchange for your premium payments, the insurance company will pay a lump sum known as a death benefit to your beneficiaries after your death. Your beneficiaries can use the money for whatever purpose they choose. Often this includes paying everyday bills, paying a mortgage or putting a child through college. Having thes afety net of life insurance can ensure that your family can stay in their home and pay for the things that you planned for.
• Once you understand the importance of taking out a life insurance policy, you need to make the right choice. To do this, you need to ask yourself about your needs and purchase a product that works for your family and insurance premiums that fit your budget. A financial security advisor can help you with this. You need to ask yourself three main questions to figure out what type of life insurance would work best in your situation.

  Choosing life insurance
• Choosing life insurance


  Family and work situation

  Life goals

  Coverage type
• First of all, your insurance needs will be influenced by the following: your family situation, your age, your health situation and whether you are an owner or self-employe

  Family and work situation
• Life insurance is important, whether you are single or in a relationship. In the event of your death, your loved ones will have to pay your funeral expenses and pay off any financial liabilities you have, such as your debts. If you have insurance coverage, your debts will not be a burden for your family members.
• In addition, your loved ones may also have to bear some of your shared responsibilities, such as your credit card fees, your lease, your car payment, your mortgage payment, your student debt, or other. If you have children, life insurance will let you replace the lost income from one of the parents to provide for the children’s needs.
• Life insurance is also an effective financial tool for protecting your business. It lets you ensure you and your loved ones’ financial security should something bad happen.
• Your personal, family and professional goals will also determine your choice of life insurance. For example, do you plan on having children? What are your career and income goals? At what age would you like to retire?

  This will help you evaluate how much life insurance you should take out to protect your loved ones in the event of death

  Life goals
• You have thought about your situation and life goals. Now all you need to do is figure out what type of life insurance is best for you.

  For example, you might ask yourself if you need short-term or long-term coverage. Do you want coverage that generates liquidity and surrender value that you can use to

  reach your goals, etc.? Once you answer these questions, you will be well equipped to choose the life insurance that works best for you.

  Coverage type
• A financial security advisor will be able to guide you in answering all these questions, and based on your answers, can direct you to life insurance that meets your needs.
• Best Age to Get Life Insurance

  When it comes to buying life insurance, younger is better. The right time to buy life insurance varies from person to person, depending on family and financial circumstances. Generally, you need life insurance if other people depend on your income,or if you have dept that will carry on after your death. After all, you don’t want to leave your loves another without money to live on or on the hook for your creditcard debt.
• Types of Life Insurance

  1. Term Insurance
  2. Whole Life / Permanent
• the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from 1 to 30 years. Most term policies have no other benefit provisions.

  Term Insurance
• two basic types of term life insurance polices

  1. Level term insurance
  2. Decreasing term insurance
• means that the death benefit stays the same throughout the duration of the policy

  Level Term Insurance
• a form of term insurance in which that will be paid to the beneficiary are reduced over time and the premium remains constant.

  Decreasing term insurance
• pays a death benefit whenever you die—even if you live to 100.

  Whole Life / Permanent
• Three major types of whole life or permanent life insurance:

  1. Traditional whole life
  2. Universal life
  3. Variable life
• both the death benefit and the premium are designed to stay the same level throughout the life of the policy.

  Traditional whole life
• the insured person is covered for the duration of their life as long as they pay premiums and fulfill any other requirements of their policy to maintain coverage.

  Universal life
• this policy combines death protection with a savings account that you can invest in stocks, bonds and money market mutual funds.

  The value of your policy may grow more quickly, but you also have more risk. If your investments do not perform well, your cash value and death benefit may decrease. Some policies, however, guarantee that your death benefit will not fall below a minimum level.


  Variable life
• The important thing is to choose the right life insurance for your budget and your needs. Over the years, your needs, your family situation and your life goals will evolve.

  When that happens, it will be time for you to re-evaluate the right type of insurance for you to ensure you are covered properly.
• Remember that you are never too young to buy life insurance, since the younger you are, the lower the cost of your premium. Your financial security advisor is there to provide some guidance in this process, based on your reality and your goals
• Remember that life insurance can be tailored to meet your specific needs; you can decide on the type and amount of cover you need, the premium you can afford and how long you want it for. Not everyone needs life insurance, but if your children, partner or other relatives depend on you financially, including parental responsibilities, taking out life insurance could be worth it to help provide for your family in the event of your death.
• If you’re a homeowner, a parent, or responsible for anyone else’s financial security, life insurance is something you may wish to think about. If you pass away during the policy term, your loved ones could receive a cash sum, which can be used to meet their ongoing living costs.

  Please remember that life insurance is not a savings or investment product and has no cash value unless a valid claim is made.