I have been in the
insurance business for over 30 years and a question that continues to arise is,
“What is the best type of insurance to own?” Is it term insurance or whole life
insurance?
Experience tells
me that the best insurance to own is the type of insurance that is in force
when you die!
I have never had a
family approach me after a loved one or business partner’s death to ask the
question, “What kind of insurance did they own?”
Rather the
question is, “Were the premiums paid up to date?”, or “How much is the death
benefit?”
Yes, there are
several different types of polices and yes each type of policy can be vastly
different than one another. Is a policy permanent? Will it cover a short term
problem? Are premiums guaranteed? Is there a cash value? And, are there tax consequences?
These are all fundamental
differences.
Never overlook the
most basic premise. If you died tonight, will the death benefit in your policy
do what you want it to do? A $100,000 death benefit is 1/10th of a
$1,000,000 death benefit. If the need is $1,000,000 then a $100,000 policy will
simply will not cut it; regardless of whether it was term insurance or whole life
insurance.
So, here is a thought;
solve the problem first. Start with an amount of term insurance that solves
your problem. As one client told me, “let’s stop the bleeding first”. Then
convert the term insurance into permanent insurance based on its own merit, and based on
your needs, affordability and financial plan requirements.
If you are in Nova Scotia and would like
some insurance advice, please contact Corry Collins:
902-444-7000
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