Life Insurance - What Plan Is Best For You?

There are so many options out there when it comes to life insurance. Do you know what type works best for you? Perhaps a dual option is better for you. Before you choose a policy you have to choose an agency and an agent. This can be difficult if we do not already have a good relationship with someone.

Regarding choosing an agent, I recommend looking for someone with a solid character. Someone you know, like and trust. If you do not know any agents, ask a friend for a referral.

Policy Options

1. Term Life Insurance: Term insurance is one of the most requested forms of life insurance due to it’s inexpensive price tag. Term insurance if often less expensive because it expires. For example, if a 40 year old person buys a 20 year term policy it will cover their life until age 60 which is 20 years later. Insurance companies know that there is a good chance the person will live beyond age 60 so they do not charge as much for this policy compared to one that lasts a lifetime. In my opinion, term policies are good as an added benefit on top of a universal or other kind of policy. They are also good for limited timeframes like, paying for a child’s college. For example, if I have a 3 year old and I am the primary bread winner, I might buy a 15 year term policy. This would trigger a payout if I die before my child goes to college near age 18.

2. Universal Life Insurance: This is the type of policy I think most people should own. Once you purchase this policy it is good for life as long as you make the scheduled payment on time. It doesn’t matter if you live to be 105, most policies will cover you. In addition, if you ever feel the need to pay extra on the policy during good times they will allow it. In fact, they’ll pay you a nice interest rate on the over funding. Then, if you encounter tough times, the policy has you covered to the extent that you over paid. You can borrow against the cash reserves tax free as well. The benefits in this type of policy go on and on. I recommend you contact me, your financial advisor or life insurance agent before you make a decision. Often times, I recommend that my clients consider both policies to cover one life.

Some other popular types of life policies are equity index universal life which ties to the stock market, variable life insurance which directly invests in the stock market and whole life insurance which can pay interest based on the success of the life insurance company.

Rich Strehl is a financial advisor and insurance agent in Tampa, Florida (FL) helping clients strike a comfortable balance between their life insurance needs and their retirement plans. Mr. Strehl offers free consultations in Florida and can be reached at rich@richstrehl.com. To learn more about Mr. Strehl and his practice visit www.RichStrehl.com