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Life Insurance

What Is Life Insurance & How Does It Fit into Your Financial Plan?

A life insurance policy provides death benefits, which translates to financial support for your dependents. Some policies allow you to build up cash value, which you can access during your lifetime. Our financial advisors can help you determine what type of life insurance makes sense for your situation and how your policy fits into your overall financial plan. 

We can explain the different options for life insurance and what type of coverage makes sense for your situation. There’s no one-size-fits-all policy, which is why we take the time to get to know you and your circumstances before making recommendations. 

Frequently Asked Questions

With life insurance, we differentiate between two main types: whole life and term life. Whole life insurance offers lifelong coverage and builds up a cash value with your contributions. While both policies pay out a death benefit, whole life is the only type of life insurance that also works like a tax-deferred investment. Term life insurance doesn’t have a cash value, and it only pays out death benefits during the term of the policy. Most often, the term is limited to 20 or 30 years. Term life is a low-cost way of providing for your dependents if you die young. If you have dependents who need your support into adulthood, consider a whole life policy instead.

Your life insurance policy is there to provide for your dependents in the event of your death. Your age isn’t as important as the age of your dependents when purchasing a policy. However, if you purchase whole life insurance when you’re young, you can build significant savings for yourself or your beneficiaries in the future while paying reduced premiums.

If you have a whole life insurance policy, you can withdraw or even borrow money from the policy. Doing so will reduce the amount your beneficiaries receive as a death benefit, and if you deplete the cash entirely, it effectively cancels your policy. Your financial plan may benefit from using life insurance as a financial cushion and investment, too. A whole life policy does not have to be used to support your dependents. Your life insurance policy can be part of your tax savings plan, and you can even designate a charity as your beneficiary.

If you have life insurance through your employer, the policy will most likely automatically cancel after your employment ends. To protect your loved ones, we recommend setting up a new life insurance policy right away.

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It’s Time to Review Your Life Insurance Policies  

When was the last time you reviewed your life insurance policies? We can help you review your current life insurance policy and make sure you have the best coverage for your situation. Don’t leave your loved ones unprotected. Call us today to schedule an appointment for a life insurance policy review.    

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