According to the Wall Street Journal and LIMRA, nearly a third of U.S. households have no life insurance coverage, the highest percentage in more than four decades. So why are so few people opting for the protection of life insurance? Clearly the current economic contraction of the past few years has been a major driving factor is the popularity of life insurance, but I feel it is also a lack of understanding the benefits of the product.
You will hear and read about many benefits and reasons to by a life insurance policy, such as income replacement, paying off a mortgage or other debt, paying for college tuition, and even to pass wealth from one generation to the next. But these aren’t truly benefits; they are simply ways to spend the benefit. The real benefit of a life insurance policy is simply the amount of money you receive when the policy is paid out by the insurance company. How you choose to spend that benefit, whether it be on debt or tuition is up to you. But the benefit is the large sum of money.
Life insurance is a good investment. I don’t think you will find many people who will say it isn’t. What you will find is a lot of debate on if term life insurance is a better investment than whole life insurance. But both sides will always agree that the investment, regardless of permanent or term life insurance, is a wise one.
It is hard to find an investment that will guarantee a payout that is worth investing in. But life insurance does just that. You are guaranteed a payout based on the terms of the contract. Even assuming a $100 payment on a $1,000,000 30 year term life insurance policy, your total investment would be $36,000. Someone may argue that you may be able to exceed $1,000,000 by investing $100 a month into stocks, bonds, and mutual funds, but could they guarantee it? Not a chance. Even at a $400 a month payment for 30 years, the total investment is “only” $144,000.
Someone could also argue that a term life insurance policy doesn’t come with guarantees either because at the end of the term you aren’t left with either the protection or the money you invested in the policy. But in fact the death benefit is guaranteed if you pass away during the term of the policy, and there are products available that offer protection for your entire life time or a return of all premium payments made.
I’m not saying that all of your money should be tied up in life insurance, but if you have people in your life that you would like to protect financially upon your death, you should have some form and amount of protection. How much protection varies from person to person, but the need for the product is the same for everyone.
Call now to see if you can save money on your insurance by speaking to a professional independent insurance agent at Journey Insurance.
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Journey Insurance Agency * Irvine, California * 888.323.7480
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