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Cash value life insurance or term - You decide

Protect your family!
Protect your family!Green Valley Pediatrics

Most people don't like to talk about death but the reality is, we are going to die.  The big question is, is your family prepared?  Preparation is key to making sure that loved ones are properly protected in the event of devastation.  Life insurance is merely that - income protection.  It is an assurance that when death happens, the income that died with the deceased is guaranteed to keep the family functioning.  


Most Americans are unaware that there are four types of life insurance: Whole Life, Universal Life, Variable Universal Life and Term.  Each of these insurances perform differently but three are in the same family - cash value.  Term life insurance is the only insurance that is sold with the end marketed up front, thus the name - term.  The client only keeps the policy for a period of time and then it expires. 


Many people reading this would think, 'Why would that be a good buy.  Life insurance should be kept for the duration of your existence.'  That couldn't be further from the truth.  Here are the facts: Whole life, Universal and Variable insurances are sold to the consumer with the notion that both a savings component and insurance are all wrapped into one.  While that may sound enticing, many times the purchaser has no clue that they are being overcharged for a basic service, not to mention the fact that these policies don't qualify as retirement vehicles - IRA (although often sold as that).  In addition, 99.99% of Americans are unaware of the 5 "rules" that lie in wait within these policy pages that have devastated families financially for over a century.  


A Term life insurance policy is the complete opposite.  It is sold with no savings component, is far cheaper BUT it will expire in 10-35 years, depending on the purchasers needs and age.  Now, that may sound frightening to most, especially with life expectancies that span 80, 90 and even 100 years.  So where is the happy median.  It can be found when the consumer purchases a term policy to cover the needs of their family for pennies on the dollar and invests in mutual funds - two vehicles serving two different purposes.


Check out Suze Orman as she educates on this concept.


 


Suggestion: Families that have cash value life insurance policies (Whole Life, Universal Life or Variable Universal Life), should have them analyzed by an agent as soon as possible just to make sure that the policy hasn't lapsed and to educate you on the rules within.  It's best to be safe than sorry!!

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