My Advice on life insurance.
Term Insurance - Buy as much as you can, as early as you can. Insurance premiums, up to age 40 for a million dollars of 10-year term are about, $600.00 per year. Your car insurance is more expensive. You are more valuable than your car? Right!
Today life expectancies are increasing and naturally insured people live longer, because insurance companies only insure the healthy people. Therefore, the really important feature of every term policy is that it is convertible to permanent insurance without evidence of insurability later in life.
Permanent insurance - This is the insurance you have been told is a lousy investment. That may have been true when interest rates were 7% but when they are 1.0% the tax exempt status of a permanent insurance policy earning 4.5% may be the best investment you ever made. Permanent insurance is also called whole life, or Universal Life, it should be called Versatile Insurance because of all the things it can do. The key is that it will remain in force to age 100, and if you live that long the company will write you a cheque for the face amount of the policy.
Don’t depend on your group insurance. Group insurance has a nasty habit of running out 30 days after you leave an employer. The last thing you are thinking about when you change jobs is whether or not your new employers group benefits will be available to you.
Don’t buy bank mortgage insurance. Mortgage insurance pays the bank not your beneficiary. Bank mortgage insurance is group insurance and doesn’t have the same protective clauses that an individual policy has. You may think you have coverage but the company may challenge the validity of the claim and delay payment.
Why play roulette with your family when you can take control and probably save money in the process. A policy that you own and control in the long run it will be cheaper, more secure and in force when it is needed.
Get together with a financial advisor who is an insurance broker and get the facts.
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