Skip to main content

Why Buy “Term” Insurance?

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:
corry@maritimewealth.com
902-444-7000


Please like, share and comment on my newest post!

Comments

Post a Comment

Popular posts from this blog

Attend MDRT as an Aspirant or Manager

The Million Dollar Round Table (MDRT) holds its annual meeting this June in Orlando. Members from around the world will be in attendance. The annual meeting is the flagship event for the MDRT. Top advisors from over 70 countries meet and share world class ideas on how to grow your business and how to develop a thriving practice. The main platform is always full of motivation, business ideas and stories that may change your life. Ten thousand people are expected this year. The focus sessions are detailed sessions drilling down on the specifics of specialized subjects. Members and non-members are invited to speak on their area of speciality. Networking with leading industry people (who become friends) is one of the highlights. The mentoring program at MDRT provides a chance for non-members to attend as a guest.  The rules can be found at https://www.mdrt.org/membership/mentoring/ , but here are some of the particulars: The MDRT Annual Meeting scheduled for June 4-7, 20...
Post a Comment
Read more

How Long Will 1 Million Dollars Last?

Once upon a time, a million dollars was a large sum of money. If you had it, you were a millionaire, and everyone was jealous. Today the question is often asked: “if you won a million dollars, would you quit work?” Well the answer depends on several factors like your age, your need for money, and even your health. To answer the question how long would one million dollars last, let’s look at it this way: How long will $1,000,000 produce an income for you before it runs out? Let’s say you needed to take $60,000 as an annual income to spend. Let’s also say that you wanted to increase that $60,000 by 2% per year just to keep up to inflation. To run the numbers, we would assume you wanted to invest your $1,000,000 in a relatively secure place. The rate of interest would be around 1.5% if you wanted a guaranteed return, or maybe a 5% return if you wanted to assume some risk. For argument sake, let’s give you 3.5% over time, and income tax at about 25%. With the above parameters, you...
Post a Comment
Read more

Created by: Corry Collins - Top 10 Fall Financial Checklist - Save Time, Money and Tax.

Summer is not officially over until September 21 st . However, “back to school” week is a sure sign of the fall! The fall is a busy time in our financial planning office, as people seem to use this time of year to tidy up many small items concerning everything financial. It might also be a good time of year for you to do the same, especially if you aren’t in this “fall time” habit. Many people have a list of items to refer to when it comes time for financial clean up. Here is a typical list:       Update beneficiaries on your insurance policies’ if required.       Increase your disability coverage if your income has increased.       Review your RRSP investments against your current Risk Tolerance questionnaire.       Top up your Tax Free Savings Account       Increase your RRSP deposits by 10%       Question your bank to see if you can save money by renewing your mortgage ea...
Post a Comment
Read more