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Over 300 Life Insurance Articles: How Much? What Kind? and Why?

Aug 17, 2007
Whether you own a business or are employed by one, you know that life insurance is an important part of your financial security equation. Some say it is a precaution that all families should take. I say that it is the most important precaution.

Lots of people - especially our lawyers and accountants - have opinions about what kinds of life insurance we should own. For example there's universal life, whole life, term and a raft of policies that combine elements of them all.

Universal Life is a flexible-premium, adjustable benefit policy that accumulates account value. Maybe that suits you, your family, your savings patters etc.?

Some experts content that life insurance is protection against lost income-- no more, no less. If that's your opinion - and you know precisely how long that protection against a loss of income will last, maybe a term insurance policy is right for you.

Term was the original form of life insurance. It was conceived as protection for a specific term of time - like how long it would take for your ship to sail from England to New York and back. After you returned and were celebrating in the pub, well - you'd be on your own for that.

Whole life is so named because it's designed to stay in force throughout your life. The idea was that you might get killed while you were flashing all the money you made on your last voyage to the thugs that hung out at the bars along the wharf and if you survived that, it would be time for your next voyage across the Atlantic.

Eventually the actuaries figured out a way to provide you with a level premium year after year and if you beat the odds and didn't go down at sea, get knocked off in a bar, run over by the fire brigade, or contract some dread disease - social or otherwise, they'd give you some, all, or more of your money back.

As you can see, life insurance is a risk management tool available to protect against loss of life, yours. Which life insurance should you own? Which is more or less expensive - how do you define expensive anyway - permanent or term?

Most people prefer permanent life insurance because it is intended to provide protection for your entire life, and experience teaches us that as we move through life - needs change but they never go away.

Life insurance to protect the young family morphs into insurance to pay the mortgage on your second home or to guarantee your son's and daughter's graduate school (in case they don't make it in pro ball).

The need for life insurance continues as a way to guarantee your grandchildren's education, which later becomes a need for life insurance to subsidize funds set aside for your retirement. And then there are all those pesky "final expenses" - paying for the things you committed yourself to, when you thought you would life forever.

With level premiums and the accumulation of cash values, whole life is a good choice for long-range goals.

Don't get me wrong I am not putting down term insurance. It gives you the protection you need immediately and cheaply (in terms of the money you spend for it today). It offers the most affordable protection for your family. And isn't this why you buy life insurance in the first place?

Beyond term insurance, which you can buy for almost nothing online, and permanent life insurance that, in my opinion, requires that you have a close personal relationship with a trained and experienced life insurance agent - there are all sorts of hybrids.

For example universal Life, a variation of Whole Life offering more flexibility while providing a permanent death benefit to those who depend on you. Or variable universal life, a form of cash-value insurance with even greater flexibility over time.

So, depending on your needs you may choose a term, universal, variable universal, whole life or guaranteed issue life insurance policy. With all these variations you will be able to find a combination of coverages that suits your personal circumstances.

Life insurance is a long-term commitment, but so are your responsibilities to your family and your business. Life insurance brings money TO your family and business so YOU can keep the promises you made.

How much and what kind of life insurance do you need? What is right for you today? How can you figure that out on your own - so you won't fall prey to sales people who are better prepared at selling what they have than you are at buying what you need?

That's why I wrote this article. I figured that the more you know the better decisions you are likely to make.
About the Author
Wayne Messick is an investigative reporter whose web site offers over three hundred life insurance articles at http://www.ibizresources.com/life_insurance/index.html His comments appear daily on the company's blog.
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