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Life Insurance

The two most common questions that we are asked about life insurance are:

  • How much life insurance do I need?
  • What kind of life insurance do I buy?

Every scenario is different.  Your life insurance needs will differ from the client we talked to yesterday.  Your needs will differ from your needs from ten years ago. So you should forecast what your needs are now and into the future.

We can certainly use a needs assessment program to derive the amount of life insurance.  The programs and worksheets vary between being very elaborate to using 10 to 12 times your annual income.

Once the amount is decided, the next step is deciding on what type of policy to purchase.  There are some policies that are scams, but the vast majority of the policies through reputable life insurance companies are good.  Every good policy serves a function and has a proper scenario that it is applicable.

However, if your concern is death benefit, you know how long you need the life insurance, and you’re within the age bracket of a company’s underwriting criteria, term insurance is very hard to beat.  Term insurance is the least expensive type of life insurance, because you are purchasing only the death benefit.  

Term and whole life policies are generally based on solid guarantees.  You pay this amount and you have this amount of death benefit for this period of time.

Universal life policies have historically had poor guarantees.  The universal life policies have had a fluctuating interest yield and cost of life insurance.  Many of these policies evolved to their minimum guaranteed interest yield and their maximum cost of the life insurance.  All you have to do is research the many class action lawsuits regarding universal life. A bunch of people have lost a bunch of money with this product.  Fortunately several companies have greatly improved their universal life products and the guarantees. Some of the good indexed universal life policies will outperform the term policies.  

Term insurance is very reasonable.  There is no reason for a young adult not to have sufficient life insurance.  When a 35-year old couple can acquire $1,000,000 of death benefit on each (if they meet the company underwriting guidelines) for under $45 a month, there is not a good excuse for not having an individual term policy.

Take this into consideration; we tracked the local obituary column for one month.  It saddens us to report that 8 Alvin residents under age 45 passed away. Their average age was 30.75 years old.  The causes of death were auto accidents, various illnesses and job related injuries.

Furthermore, the majority of Americans do not have any life insurance.

As a result, we are trying to inform all of our clients that life insurance can be easy to acquire, low cost, and a means to provide family financial protection.

Don’t wait for the perfect time to buy life insurance.  If you do, it is too late.

Life Insurance Alvin TX

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