Life Insurance Isn't Complicated

The phrase "everyone is unique" certainly holds true when considering how much life insurance you need.  However, life insurance does not have to be complicated.  The industry has taken some major steps in recent months to make the writing and issuing of policies much quicker and simpler.

There are three main types of life insurance to know as a starting out point:

1. Term Life - This is generally least expensive type of life insurance.  As the word "term" implies, this type of insurance lasts for a certain time period.  Generally this is 10, 15, 20 or 30 years.  The amount of insurance is flexible, and is less expensive the earlier in life you purchase.

2. Whole Life - This type of life insurance is different from term insurance in that it is built to last the policy owner's entire life.  The other major difference in whole life and term is that whole life builds tax deferred cash value during the duration of the policy (in most cases).  That cash value builds differently depending on the type of whole life you purchase.  For example, some are dependent on the stock market, others are based on an interest rate set by the carrier you purchase your plan with.  You are able to borrow against this cash on a tax favored basis, should you so need.

3. Final Expense - Final expense is built on the whole life platform, so it does build cash value.  However, these policies are lower face amounts than traditional whole life, generally maxing out around $50,000.  These policies are a smart and less expensive option for older people who need some life insurance to cover their final wishes, or pay off any debts after they pass in order to keep their children from having to take on that burden.  Some policies are available on a guaranteed issue basis, for individuals who might not qualify for certain health reasons.

If you are interested in learning more about selling life insurance, please join us on March 1st as we discuss selling with no fear.  Register Here.

Emily Mathis, The Brokerage, Inc.