A prudent [wise] man sees danger and takes refuge [protection], but the simple [fools] keep going and suffer for it. Proverbs 27:12
In terms of life insurance, the scripture above may well be read as, “A wise man sees danger and provides protection, but the fool keeps going, and his FAMILY suffers for it.”
We specialize in term life insurance for our clients. We do not advocate whole life or “permanent insurance” as the basis of a family’s life insurance program. Neither do we offer these types of coverage as retirement vehicles. Far better uses of money exist for that purpose.
Term life insurance is best defined as “pure protection.” It provides the greatest amount of coverage for the least amount of monthly or annual cost.
Term insurance is temporary insurance and is available for specific periods of time, including 10, 15, 20, 25, or 30 years. During this period of time, the level of coverage generally remains the same, and the premiums are guaranteed for this period of time, as well. Some policies offer increased death benefits over time which acts as a hedge against inflation. However, in a properly constructed financial plan, the need for insurance should actually be decreasing over time.
Term life insurance is best used to make provision for a family’s needs until those needs can be covered by accumulated assets or the needs disappear.
For example, a married couple in their late 20′s, with two children, a mortgage, and limited savings, with both parents working, should consider life insurance on both parents to provide for:
Education and rearing of the children to adulthood, including college
Retirement of the mortgage so the surviving spouse is not left with this burden
Or the proceeds of the policy can be invested to provide a steady income stream
Therefore, a program of insurance for about 20 to 30 years is appropriate in this case. At the end of those 20 or 30 years, both children should be through with college, and the mortgage should be retired. When these needs disappear, the coverage should no longer be needed.
In the meantime, this same couple should be saving and investing for their future. By the end of the same 20 or 30 years, the couple should have amassed sufficient assets to provide for the needs of the surviving spouse should one die unexpectedly after the life insurance program has expired.
INTERESTED IN HOW WE CAN HELP YOU?
Please call us at 334-685-1805 for a no-obligation consultation as to your family’s life insurance needs. We will work with you to design a program which meets your projected needs and budget.
We have over 75 insurance companies from which we can obtain the best possible rates for your situation. We are certain that we can find something which will be in your best interests.
