When it comes to life insurance, there are all kinds of questions. The most common one is, “What kind should I buy?”
Your life insurance advisor will tell you something like, “Well, that depends.” That’s true; it does depend, primarily on your health and age.
Another one is, “Which is better, term or permanent life insurance?” It’s a different question than the one above, but it has the same answer. It also depends. The fact is, no reputable life insurance agent can recommend term or permanent insurance without a thorough needs analysis.
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These are good questions, but here are three others you NEED to ask!
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1. Should I consider a policy that gives me ALL my money back at the end of the term?
If you could buy a type of term life insurance that, after it expires, pays you back EVERYTHING you paid in premiums (every last penny guaranteed!), would that be something you’d be interested in?
That is exactly what you can do with Return of Premium (ROP) life insurance. You protect your family and secure their financial future with life insurance, and then, when the designated term expires, ALL the money you paid in premiums is returned to you. It’s a win-win situation.
For example, a $1,000,000 policy with a 30-year term bought for $10,000 a year would generate a $300,000 refund to the policy owner at the end of the 30th year. Not a bad way to head into retirement!
Can you think of a better way to save than getting ALL your money back? (Wouldn’t it be great if the car insurance industry was paying attention?)
2. Should I consider a policy that gives me access to my death benefit WHILE I’M STILL ALIVE?
Most people know that a beneficiary receives the death benefit when the insured dies. Pretty straightforward, right?
But what most don’t know is that with many permanent insurance policies (and some term policies), there are “living benefits” available that allow the policyholder access to the death benefit without dying.
These living benefits come in the form of a rider (add-ons) that is attached to your life insurance policy.
Depending on the type of multifunctional policy owned, you could receive payment to cover a terminal, chronic or critical illness. The amount you get will be deducted from the future death benefit.
How are you saving? With this rider on your life insurance, you’ll be eligible for money that helps you do the following: avoid dipping into (or draining) your savings; make up for lost income from not being able to work; and cover what medical insurance doesn’t.
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3. Should I consider some form of long term care insurance along with my life insurance? And speaking of long term care, how likely is it that I’ll need it when I’m older?
The answers to these questions are short and simple—YES and VERY.
According to USA Today, there’s a 91% chance that you or your spouse will need long term care at some point. In other words, it’s a safe bet that if you buy long term care insurance now, it’ll come in handy down the road.
There are two ways to make sure you’re covered with long term care insurance. You can either buy a life insurance policy with a long term care rider, or you can buy stand-alone long term care insurance. With either option, you’d receive funds to cover care needed for activities of daily living or a severe cognitive impairment (if you qualify), including home health care, assisted living facilities, nursing homes, etc.
Live-in care can be $200 a day and a nursing home can be up to $300 a day (and that’s now; it’ll only cost more years from now!). That’s as much as $219,000 a year if both you and your spouse need care simultaneously. Without long term care insurance, that financial burden could fall to your kids or other loved ones (that is, after your savings have been completely wiped out).
4. (Bonus Question!) How do I learn more?
For more information about life insurance, go here or call 1-877-908-5094. Learn more about life insurance at AccuQuote’s creatively named Life Insurance Learning Center.
Take two minutes and get started (for FREE) protecting your family with life insurance, which secures the financial future of your loved ones and turns pennies into dollars at the exact moment those dollars are needed most. Call 1-877-908-5094 or go here.
Want to read about life insurance, health insurance, disability insurance, long term care insurance, annuities and other important personal finance and financial planning topics straight from AccuQuote President & CEO Byron Udell? Go to AccuQuote’s blog. Are you more of a video person? There is a bunch of compelling content here starring Byron, one of the country’s foremost experts on life insurance.
This content was provided by AccuQuote and did not involve the Kiplinger editorial staff.
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