Making Dreams A Reality
Insurance 101

We have been having a lot of conversations these days with people about, INSURANCE.

We are often asked; “Can you help me with this” and our response includes helping people gain a better understanding of their own personal needs and how insurance works.

Let’s start with talking about LIFE INSURANCE and we’ll leave the conversation about disability, critical illness & long term care for another time.

How do you know how much life insurance you need? That’s our starting point, determining how much insurance you need.

Before addressing that, providing some clarity on the difference between term insurance & whole life insurance would be helpful.

Term Insurance is meant to cover off a temporary need, in your life. What does that mean? This includes; paying off your mortgage, getting your kids launched, paying off your student loans and any other debts you may have & wage replacement.

The goal is to have sufficient life insurance in place to take care of all this, in the event of your death.

Whole Life Insurance is meant to cover off an insurance need you will have for your entire life. Your funeral and last expenses, providing an inheritance, charitable giving & transferring your estate in the most tax efficient ways.

I purchased my first whole life policy when I was 25 years old & called it my; “to bury me policy”. I still have it, am glad I do and, at one point in my life, needed to borrow from the cash value inside the policy. You can purchase a plain vanilla whole life policy or the deluxe model, with or without cash values & dividends that purchase additional insurance.

I put my first “estate planning policy” in place when I was 31. As you get older, insurance becomes more expensive based on your age so the earlier you can get your insurance plan in place, the better.

There is, a hybrid of these two types of insurance and it’s called Universal Life Insurance, it has an insurance component & an investment component and, I use this type of insurance in more advanced financial planning situations and, as an alternative, depending on my clients needs.

A review of your insurance needs should take place whenever there are any significant changes in your life, like the birth of a child, purchasing a new home, upgrading your home, preparing for retirement & starting a new business.

Working with someone who can help you analyze your own personal situation & needs regarding the amount & type of insurance that will work best for you, is very important.

This needs to be done in conjunction with your overall financial plan with a “Qualified Financial Advisor/Planner” (Future topic to be discussed)

Making Dreams a Reality Financial Services helps to clarify with you the pieces of your life puzzle, putting them together creating the picture and road map to make your dreams a reality.