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Life Insurance

There are two types of insurance, term and whole (permanent). Term insurance is generally the least expensive and least complicated type of life insurance. It provides insurance protection at a low cost for a specified period of time. Whole, or permanent life insurance, is usually an appropriate way for people to meet long-term needs. Over time, it may be the least expensive form of life insurance since premiums are fixed and it builds value. Plus, this cash value accumulates on a tax-deferred basis and it can also be borrowed against in case of financial emergency.
Ask yourself the following questions:

  • Do you have either a personal or employer-provided life insurance policy?
  • Do you have other policies (i.e. burial, cancer, accident, etc.)?
  • Do you have a Last Will and Testament or a Written Trust?
  • Have you appointed an Executor to oversee your estate?
  • Does your Executor or Beneficiary know where to locate your will or trust?
  • Does your Executor know how you would like him or her to handle the proceeds from your policies after your death (i.e. give to children, grandchildren, alma mater, charitable trust, etc.)?

The answer to each of these questions should be “Yes.” If you have any “No” answers, do something about it today! If your only policy is provider by your employer, you should consider purchasing a personal policy because coverage often ends when you leave that job. If you have policies which were acquired several years ago, you may want to review them to see if an increase in benefits is warranted. For example, your five year old burial policy may be valued at $3,000 while the average cost for a traditional funeral today is between $8,000 and $10,000. Or, you may have allotted $20,000 for college costs when your daughter was born ten years ago. Unfortunately, the current average tuition for a public college or university is more than $12,000 per year and is almost $30,000 per year at private schools.