The Best Insurance Policy? Don’t Make This Mistake!

Every day, I speak with people in a real life insurance crisis — the term insurance policy they own is going to run out too soon and it can’t be converted. If you bought term insurance in your 30’s or 40’s thinking 20 years of coverage was sufficient, today you may be concerned it doesn’t take you far enough. We help people in this situation and we help others avoid ever being there. By following a few simple tips, you will NEVER have a gap in coverage.

Helping you understand insurance and retirement strategies, in simple terms, is the force that drives our business.

On the Life Cycle Financial Planning spectrum, your goals and objectives change and those changes impact the type of insurance you need. You want a policy that will adapt to your changing life circumstances. The best life insurance policy is all about flexibility and customization.

What is the best type of life insurance policy” is the most common question I am asked about life insurance. “How much should I buy?” runs a close second. There is no “best” life insurance type. Each one — term, whole life, universal life and variable life have been designed to do very different things. An experienced insurance professional can easily help with this decision. Make sure the professional you choose can offer every type of contract. Too often we find insurance agents “pushing” one type of policy on every client. Similar to the auto industry, I prefer the AutoNation structure where I have choices and objective guidance from a sales person who does not care what brand I buy. Buying life insurance is not a one size fits all solution.

What is the best motor vehicle? Some would say Ferrari, Tesla, Mercedes or BMW. Others would say Harley Davidson or a golf cart and others might say a John Deere tractor. Hopefully, you get my point. The best motor vehicle fits your needs. If you need an SUV, you rule out a Mini Cooper.

The same goes for life insurance — if you need premium flexibility, you rule out whole life. If you need coverage for life, you rule out term insurance.

No matter which type of policy you have or will buy in the future, every owner of life insurance should review it on a regular basis, at least every 2–3 years. This kind of simple monitoring should take no more than 30 minutes.

smart-review-goals

You want a life insurance policy with the most premium flexibility and guaranteed insurability so you do not have to ever provide medical evidence in order to keep it. If you own term insurance or you are considering term insurance, speak to us about “Equity Term”.

Should you buy term insurance or permanent insurance?

For many life insurance buyers, term insurance fails when it is needed most and permanent insurance is too expensive initially. Innovation has made customization possible and I am a big believer in customization. To get the best insurance policy for you, make sure your policy has:
  • Installment Payout Option
  • No forced conversion deadline. The coverage MUST stay inforce as long as you need or want it.
  • Cash value growth, especially in the early years.
  • Guaranteed cash value in the early years.
  • Flexibility to change design as needs change over time.
  • No surrender charges.

All life insurance is NOT created equal. If you are considering buying anything that requires a license for it to be sold, a good rule of thumb is to buy it from a licensed professional, hopefully with experience. There is no financial upside in working without a professional. The built-in commission will be paid, no matter what. Buying online through a web site that sells insurance is exactly like buying the insurance from a professional. These web sites are not like buying direct from the insurance company, something that is not done in the life insurance industry.

Unless you are buying from the one or two life insurance companies that sell direct (most life insurance buyers are unaware of these companies), there is no advantage of “going it alone.” As the innovator of life insurance without built-in commissions, I can help you purchase fee based policies from these companies.

Visit us at www.LifeCycleFinancialPlanners.com, call me direct at 561–869–4500 or email me at tb@lifecycleplanners.com.


Originally published at Don’t Outlive Your Wealth!.