Life Insurance for Smart Dummies

Figuring out Life Is Nearly Impossible, Life Insurance Isn’t As Hard.  

Thousands of years ago, philosophers were asking one burning question: what is life? Today, we ask a similar question, but with one twist: what is life insurance? We are here to help you answer that question. 

Basic definition of life insurance: cash that goes towards your beneficiaries in the event of your death

What does it generally go towards:

• Burial and final expenses, replaces income

• Creates generational wealth

• Covers related taxes and pays off mortgage

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Factors to Consider

Risk Classifications:

1. Preferred Plus — the healthiest category. 

   1. Includes: height and weight must both be normal, normal lab results, no chronic illnesses, no immediate family members who died from cancer or heart disease before 60.

2. Preferred — excellent health, you fall into the category above but with a few caveats 

   1. Caveats: if you are slightly overweight/being treated for blood pressure or cholesterol. 

3. Preferred Smoker — you fall into the preferred plus category, but you have smoked tobacco this year

4. Standard Plus — your health is slightly above average

5. Standard — you have average health, where most people fall

   1. Includes: Being overweight, a normal life expectancy, several minor health conditions, family members who died from cancer or heart disease before age 60, you’re probably in this category, too.

6. Standard smoker — your fall into the standard category but you smoke

7. Substandard — people who are in poor health

   1. Includes: obese people and people with serious health issues.

Age

• 35 years old or younger – Less than $30 per month.

• 40 years old – $30 – $40 per month.

• 45 years old – $50 per month.

• 50 years old – $75 per month.

• 55 years old – $120 per month.

• 60 years old – $200 per month.

• 65 years old – $350 per month.

General Coverage to Consider

Types of Insurance

1. Permanent/Whole Life: coverage for your whole life, generally more expensive

   1. For: empty nesters and retired people

2. Term: recommended, policies for years at a time up to 30 years

   1. For: single people, single parents, married people, married people with small kids 

3. Variable: a permanent life insurance policy with a cash-value investment component that act similar to a mutual fund, but it is only available within a variable life insurance policy 

4. Universal: a permanent life insurance with an investment savings element and low premiums that are similar to those of term life insurance

Do I need Life Insurance?

Probably, but especially if you…

• Are the breadwinner

• Are a single parent

• Are a small business owner

• Are a retired or older

• Are single

Landing massage: You should absolutely invest into Life insurance and at minimum YOU SHOULD HAVE ENOUGH TO PAY FOR YOUR OWN FUNERAL.

Rule of thumb: starting with coverage equal to your annual income multiplied by 10. 

Now that you have a basic understanding, connect with Mark and Eric.  They can answer your burning questions even further!