Let's talk about life (insurance)

Nate Crosby |

Is life insurance a taboo topic or what? 

September is National Life Insurance Awareness Month! Although it may feel sort of weird to say happy life insurance month to your friends and family, this is a topic that is quite important. Before I started to think about life insurance as part of my overall wealth plan, I was much like many of you in feeling like it wasn’t my favorite subject matter. But think about it – we spend our lives preparing, saving, and investing so that we have a financial plan for our future, but does it really stop there? I believe that in our minds we are positioning at least a portion of our savings for after we can use it ourselves, we just don’t like talking about it. Life is made up of twists and turns, but one thing remains constant – providing for your family is always top of mind. Life insurance is unique because it is the only investment that is self completing. It is possible to save and never hit $1,000,000, yet I can open a $1,000,000 life policy and it is worth that value on day 1. 

How much do you really know about life insurance? 

Over the years, I’ve heard a lot of myths about this topic – it’s expensive, I’ll never pass the exam, I already have it through my employer so I’m set, it’s only useful after I die, I’ll get better returns with other investments, it’ll be a pain to claim it – the list can go on and on. Being in the insurance and investment business, I can confidently say – I get it. There is a lot of information out there and many options to consider. Depending on your needs, you can choose from life insurance policies of all shapes and sizes. 

Top 5 things everyone should know about Life Insurance

  • Payouts are tax free and timely 
  • Protects your family and your business
  • Proceeds are exempt from creditors 
  • Coverage is tailored to you - policy options range from instant issue with no medical exam to fully underwritten policies with higher coverage amounts  
  • The benefits far outweigh the investment  

As I said earlier, life insurance should be part of your overall wealth plan. It’s about managing risk and protecting you and your loved ones from catastrophic life events. 

Term vs perm policies 

The two primary types of life insurance and called term and permanent – here are some key differences: 

  • Term policies are oriented around a specific period of time. You pay your premium and you have coverage until the term period expires. 
  • Permanent policies are built with no lapse date meaning you have them for life. This policy builds cash value and you can access the cash value. 

These different types of policies are also flexible. For example, as your needs evolve you can convert part or all of your term policy into a permanent policy. Which simply means you get to design your life insurance policy to work for you. 

Happy Life Insurance Month 

I’ve seen the good that life insurance can do for people, and I’ve also seen the repercussions of not having a policy. I urge you to take a little time this month and get educated on the various types, uses, and values that life insurance can bring to your portfolio. You might be surprised by what you find out.