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Top 5 Things to Consider When Deciding to Buy Life Insurance
Life insurance is a purchase only made once or twice in a lifetime, so it is common to be unaware of the ins and outs of policy protection. The potential pitfalls are significant, however, so review the following tips before purchasing a life insurance policy.
Get the Right Type and the Right Amount of Insurance
There is no one size fits all when it comes to life insurance. There are a variety of different policies available and it can sometimes be hard to figure out exactly what type of life insurance policy you should get or even how much life insurance you need. On top of that, there’s the issue of who can you trust to give you the advice you need. Life insurance policies are usually sold by highly commissioned sales people. When making your decision, you need to be sure you are in the know before you buy, lest you get sold a policy or amount you don’t need or you overlook the types and amounts that are right for you. We can help you make objective decisions about your insurance needs, with no commissions payable to us, so you know you’re getting our 100% on your side analysis.
Don’t Name a Minor as a Beneficiary
If you’ve named a minor child as a beneficiary, or even a secondary beneficiary, after your spouse, you could be creating double trouble. First, your life insurance would have to go through a court process and subject to the control of a financial guardian, and then second, whatever is left would be distributed outright to your minor child when he or she turns 18.
You can easily avoid this by naming a trust as beneficiary of your life insurance, thereby keeping your life insurance out of court and ensuring your child doesn’t receive control until he or she is ready. Plus, then you get to decide who takes care of the life insurance money until it’s distributed to your child. And, you can even build in protection against your child’s future divorce or any creditor issues.
Term Insurance to Fund Divorce Settlements
If you receive child support and alimony, insist that your spouse have a term life insurance policy to guarantee you are able to collect on your settlement, even if your ex-spouse dies while still paying out your divorce settlement.
Compare Quotes for Whole and Term
Experts suggest most people only need life insurance to cover their working years and while they raise a family. Term life insurance is typically affordable and covers you when you need it most. Permanent insurance is best when you know you will have estate taxes to cover OR if you want to use insurance as an investment vehicle with guaranteed returns. Often times these plans have big commissions that are paid for in the early years of the policy. One of the services we provide to our member clients is to review all insurance policies, both in place and those being considered, to provide objective evaluation before you buy.
Don’t Overlook Living Benefits
A living benefits rider could allow you to access funds if you were diagnosed as terminally ill or with a chronic and debilitating condition. Planning for illness and/or disability is a critical part of making sure you are protected should the unexpected happen.
If you are ready to purchase a life insurance policy that works for you and your family’s needs, let us know. We can walk you step by step through creating a financial plan that will help you provide for your family no matter what. We offer Family Wealth Planning Sessions that help you protect and preserve your wealth for future generations. Before the session, we’ll send you a Family Wealth Inventory and Assessment to complete that will get you thinking about what you own, what matters most to you, and what your wishes are when you die.
This article is a service of The Solution Law Firm, P.A. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.