Have you been putting it off?
According to the insurance industry group LIMRA and the nonprofit Life Happens, 43% of Americans have no life insurance.1
Why don’t more young adults buy life insurance? Shopping for life insurance may seem confusing, boring, or unnecessary. Yet when you have kids, get married, buy a house or live a lifestyle funded by significant salaries, the need arises.
Finding the right policy may be simpler than you think. There are two basic types of life insurance: term and cash value. Cash value (or “permanent”) life insurance policies offer death benefits and some of the characteristics of an investment – a percentage of the money you spend to fund the policy goes into a savings program. Cash value policies have correspondingly higher premiums than term policies, which give you death benefits only. At first glance, despite these higher premiums, cash value policies may appear to provide a significant advantage over term policies based on the added investment benefits, alone—but, careful analysis reveals that these benefits only begin to tip in the investor’s favor after 10 to 20 years of monetary contributions. Term may be a good choice for young adults because it is relatively inexpensive. But there is an economic downside to term life coverage: if you outlive the term of the policy, you and/or your loved ones get nothing back. Term life policies can be renewed (though many are not) and some can be converted to permanent coverage.2
The key question is: how long do you plan to keep the policy? If you don’t want to pay premiums on an insurance policy for more than 10 years, then term life stands out as the most attractive option. If you are just looking for a short-term hedge against calamity, that’s the whole reason behind term life insurance. If you’re getting into estate planning, then permanent life insurance may prove a better choice.
Confer, compare and contrast. Talk with a financial or insurance professional you trust before plunking down money for a policy. That professional can perform a term-versus-permanent analysis for you and help you weigh per-policy variables.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Registered Representative of INVEST Financial Corporation, Member FINRA/SIPC. INVEST and its affiliated insurance agencies offer securities, advisory services and certain insurance products and are not affiliated with Triad Wealth Management
1 – nerdwallet.com/blog/insurance/who-needs-life-insurance/ [1/29/16]
2 – fool.com/insurancecenter/life/life05.htm [8/2/16]
Registered Representatives of INVEST Financial Corporation, Member FINRA/SIPC. INVEST and its affiliated insurance agencies offer securities, advisory services and certain insurance products and are not affiliated with Triad Wealth Management
Weblinks: FINRA SIPC INVEST Corporation's Financial Policy
Important Consumer Information:
This site is for informational purposes only and is not intended to be a solicitation or offering of any security and:
1. Representatives of a broker-dealer ("BD") or investment advisor ("IA") may only conduct business in a state if the representatives and the BD or IA they represent (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state's license requirements.
2. Representatives of a BD or IA are deemed to conduct business in a state to the extent that they provide individual responses to investor inquires that involve (a) affecting, or attempting to affect, transactions in securities; or (b) rendering personalized investment advice for compensation.
*This website may contain concepts that have legal, accounting, and tax implications. It is not intended to provide legal, accounting, or tax advice. You may wish to consult an attorney, tax advisor, or accountant regarding your specific situation. No representations are made as to the accuracy of the information contained herein or any information contained in any link herein.
Copyright 2017 Triad Wealth Management. All rights reserved
Check the background of this firm on FINRA's BrokerCheck.
Triad Wealth Management LLC
935-B E. Mountain St.
Kernersville, NC 27284