Skip to content
  • Sunday, June 26, 2022
freeloanfinders

freeloanfinders

Business, Your Way

  • Interesting Economic
  • Business & Finance
  • Best Investment
  • Business Market
  • Life Insurance
  • Marketwatch
  • About Us
    • Advertise Here
    • Contact Us
    • Privacy Policy
    • Sitemap
  • Home
  • Thinking About Ditching Your Life Insurance Policy? Answer These 3 Questions First
Life Insurance

Thinking About Ditching Your Life Insurance Policy? Answer These 3 Questions First

May 19, 2022
Ruth B. Brooks

Table of Contents

    • Key points
  • What is your need for life insurance?
  • What is your want for life insurance?
  • How much does your coverage cost?
  • When in doubt, bring in a professional
A stressed person looking through papers and sitting in front of a laptop at a kitchen counter.

Image source: Getty Images

Related Posts:

  • My Husband Has a $1 Million Life Insurance Policy. Here's Why I Wish He Didn't

Find out if surrendering your life insurance policy is the right move by considering needs, wants, and costs.


Key points

  • Consider your financial needs for income replacement and estate liquidity.
  • Think about your financial wants, such as goal funding and legacy gifting.
  • Understand the full picture when it comes to the cost of your policy.

There are many good reasons to rethink your life insurance policy. Maybe you’ve gone through a lifestyle change. Maybe you no longer have dependents. Maybe the premiums are just too high. Just over half of all Americans have a life insurance policy, and if you’re one of them, you should answer these three questions when deciding whether to stay insured.

Key Points:

  • Consider your financial needs for income replacement and estate liquidity.
  • Think about your financial wants, such as goal funding and legacy gifting.
  • Understand the full picture when it comes to the cost of your policy.

What is your need for life insurance?

As a tool, life insurance can help to bridge a monetary gap in some financial plans. Certain financial situations demand additional cash in the event of an untimely death, such as income replacement for dependents and estate liquidity needs. It’s important to note that temporary needs may be better served by term life insurance, while whole life insurance may be better for permanent needs.

One of the scariest financial realities of an early death is the care of those we leave behind. When considering the need for life insurance, think about those in your life who are dependent on your financial resources. Are there minor children or aging adults who are counting on your financial support? If so, the loss of that support could be a devastating blow that may be softened by a life insurance death benefit.

As any estate executor will tell you, distributing the assets of a decedent is not easy or cheap. In the case of estate planning, a life insurance policy can be especially beneficial for those with few liquid assets. When real property or business ownership make up a large part of one’s estate, it can be difficult to extract administrative fees associated with property distribution. But property and business owners aren’t the only ones who can benefit from a life insurance policy. Those wishing to avoid burdening their heirs with estate-related costs may consider having a large enough death benefit to cover the administrative fees of asset disposition.

What is your want for life insurance?

Another way to view life insurance is through the lens of achieving certain wants, such as goal funding or legacy gifting. The leverage a life insurance policy provides can help the insured leave a lasting impact after they’ve departed.

One opportunity with life insurance is goal funding, where the decedent assigns their death benefit with the intent of reaching a certain financial goal. A common example is funding a college education for a minor child, where the funding gap toward a post-secondary degree can be filled with a death benefit. In this way, the insured can ensure that goals they would have completed in life are still achieved in the event of a premature death.

Legacy gifting is another possible use of life insurance. The insured may assign their death benefit to a foundation or organization of their choice, leaving a legacy in line with their wishes. Often, policyholders will directly name charitable, governmental, or religious organizations as their beneficiaries.

How much does your coverage cost?

For life insurance, the price of coverage is known as the premium. And that premium tends to be lower for term versus whole life insurance policies.

As a rule of thumb, term insurance is pure insurance, without the ability to accumulate cash value. This cash value component of a whole life policy can make things complicated — and expensive. Whole life premiums are typically higher because they include the purchase of permanent life insurance, the funding of a cash value account, and administrative fees. And for those within the first 15 years of a whole life insurance policy, watch out! Surrender charges can significantly reduce the cash value of a surrendered policy.

When in doubt, bring in a professional

A life insurance policy can be an invaluable tool in the right financial plan. But how do you know if this coverage is right for you? One way to find out is by talking to a professional.

Unfortunately, many “professionals” are life insurance salespeople in disguise. Ask these questions to see if your professional is working for you or for a commission:

  • What are your credentials? Try to work with a CFP® professional. These certificants are held to a fiduciary standard and a standard of care above others in the industry.
  • Is your company fee-only or fee-based? Fee-only advisors are paid directly by their clients for financial services, while fee-based advisors may sell commission-earning products.
  • How are you paid? Whether an advisor is paid a salary based on assets under management, or based on commissions earned, can tell you a lot about whose best interest they’re working in.

Thinking about the financial circumstances of your death can be an incredibly difficult thing to do. But with the help of a qualified advisor, and by considering your needs, wants, and the costs of insurance, you can be certain you are adequately insured should the worst come to pass.

Tags: "Taking Care Of Business, Amazon Business Credit Card, American Airlines Business Class, Att Business Login, Austin Business Journal, Best Bank For Small Business, Best Business Bank Accounts, Best Business Schools In Us, Best Business To Start, British Airways Business Class, Business Attire Men, Business Card Ideas, Business Casual Shoes For Women, Business Continuity Planning, Business Entity Search, Business Letter Template, Business Management Degree, Business Manager Facebook, Business Plan Outline, Business School Rankings, Colorado Business Search, Delaware Business Entity Search, Drop Shipping Business, Family Business Bet, Fox Business Live, Georgia Sos Business Search, Google Business Account, Harvest Small Business Finance, How To Build Business Credit, Is Saturday A Business Day, Is Sears Still In Business, Microsoft 365 Business, My Business Google, Name Generator Business, None Of Your Business, Ny Sos Business Search, Open A Business Bank Account, Pa Business Search", Plus Size Business Casual, Pnc Business Banking, Sos Business Search Ca, Sunbiz Business Search, The Business Of Being Born, Turbotax Home And Business 2020, Tx Sos Business Search, Venmo For Business, Verizon Business Plans, Virtual Address For Business, What Are Business Days, Women Business Casual

Post navigation

Caterpillar eyes energy transition as growth driver for mining business
Yellow Pages’ (TSE:Y) Dividend Will Be CA$0.15
June 2022
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930  
« May    

Categories

  • Best Investment
  • Business & Finance
  • Business Market
  • General
  • Interesting Economic
  • Life Insurance
  • Marketwatch

Archives

  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • March 2020
  • November 2018
  • October 2018
  • January 2017

Recent Posts

  • West Virginia leaders weigh in on federal gas tax holiday proposal | News, Sports, Jobs
  • The Secret to Retiring Comfortably at 62
  • Diablo Immortal: Do I need to play other games before this one?
  • Market Street merchants look to Warriors parade for business boost
  • Elections Are Bad for Business, Israeli Economic Leaders Say

Tags

"Business Insurance Cover Coronavirus Ahron Levy Columbia Business School Business Business Consultant Certification Austin Business Letter With Logo Example Business Located Easy Location Business Platform Stocks Business Positions Seattle Business Regulation Legal Services Daystarr For Business Dimagi Business Development Toolkit Do Business Schools Accept Entreprenuers Enironmentall Friendly Business Ideas Eric Early Republican Business Owner Essec Business School Dean Essential Business To Remain Open Fall Winter Business Hours Template Fdot Woman Owned Business Certification Fixing A Damaged Reputation Business Florida Business Enforcement Free Small Business Communication Tool Law School Business Entity Outlines Mapping A Business Location Medical Business Trends Economics Mix Business And Personal Money Mlm Nit Small Business Legally New Business Agency Sales Questions Patricia Saiki Women'S Business 1990 Safety Business Proposal Sample Business Plan Entrepreneur School Business Administration Positions S Corp Business Deductions Search Tx Business Llc Sentextsolutions Business Cards Small Business Forums .Net Small Business Insurancr Tech Monkey Business Ttu Business Cards Template Turbotax Business Nys Forms Uf Business School General Studies What Business Hours Macgaffin Bar Yelp Business .Json Yelp Tax Attorney Small Business Your Business Department Zeus Panda Business Moel

Visit Now

car ac repair

BL

TL

Intellifluence Trusted Blogger

Related Article

Marketwatch

West Virginia leaders weigh in on federal gas tax holiday proposal | News, Sports, Jobs

June 26, 2022
Ruth B. Brooks
Life Insurance

The Secret to Retiring Comfortably at 62

June 26, 2022
Ruth B. Brooks
Interesting Economic

Diablo Immortal: Do I need to play other games before this one?

June 26, 2022
Ruth B. Brooks
Business Market

Market Street merchants look to Warriors parade for business boost

June 26, 2022
Ruth B. Brooks
Copyright © 2022 freeloanfinders
Theme by: Theme Horse
Proudly Powered by: WordPress
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT