Have
you been putting it off?
Provided by Benjamin Bogetto
According
to the insurance industry group LIMRA and the nonprofit Life Happens, 43% of
Americans have no life insurance.1
Why don’t more young adults buy life insurance? Shopping for life insurance may seem confusing, boring, or
unnecessary. Yet when you have kids, get married, buy a house or live a
lifestyle funded by significant salaries, the need arises.
Finding the right policy may be simpler than you think. There are two basic types of life insurance: term and cash value.
Cash value (or “permanent”) life insurance policies offer death benefits and
some of the characteristics of an investment – a percentage of the money you
spend to fund the policy goes into a savings program. Cash value policies have correspondingly
higher premiums than term policies, which give you death benefits only. At
first glance, despite these higher premiums, cash value policies may appear to
provide a significant advantage over term policies based on the added
investment benefits, alone—but, careful analysis reveals that these benefits
only begin to tip in the investor’s favor after 10 to 20 years of monetary
contributions. Term may be a good choice for young
adults because it is relatively inexpensive. But there is an economic downside
to term life coverage: if you outlive the term of the policy, you and/or your
loved ones get nothing back. Term life policies can be renewed (though many are
not) and some can be converted to permanent coverage.2
The
key question is: how long do you plan to keep the policy? If you don’t want to
pay premiums on an insurance policy for more than 10 years, then term life
stands out as the most attractive option. If you are just looking for a
short-term hedge against calamity, that’s the whole reason behind term life
insurance. If you’re getting into estate planning, then permanent life
insurance may prove a better choice.
Confer, compare and contrast. Talk with a financial or insurance professional you trust before
plunking down money for a policy. That professional can perform a
term-versus-permanent analysis for you and help you weigh per-policy variables.
This material was prepared by MarketingPro, Inc., and does not
necessarily represent the views of the presenting party, nor their affiliates. This
information has been derived from sources believed to be accurate. Please note
- investing involves risk, and past performance is no guarantee of future
results. The publisher is not engaged in rendering legal, accounting or other
professional services. If assistance is needed, the reader is advised to engage
the services of a competent professional. This information should not be
construed as investment, tax or legal advice and may not be relied on for the
purpose of avoiding any Federal tax penalty. This is neither a solicitation nor
recommendation to purchase or sell any investment or insurance product or
service, and should not be relied upon as such. All indices are unmanaged and
are not illustrative of any particular investment.
Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.
Bogetto & Associates does not provide legal or tax advice. These topics are
discussed in conjunction with your CPA, Tax Advisor and Attorney.
Citations.
1 – nerdwallet.com/blog/insurance/who-needs-life-insurance/
[1/29/16]
2 – fool.com/insurancecenter/life/life05.htm [8/2/16]
2 – fool.com/insurancecenter/life/life05.htm [8/2/16]
Financial Health...For Now & Tomorrow
Contact us Today
Website - www.bogettoandassociates.com
Telephone - 314-858-1602
Email - peter@bogettoandassociates.com
10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127
Website - www.bogettoandassociates.com
Telephone - 314-858-1602
Email - peter@bogettoandassociates.com
10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127
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