Many people often wonder when a good time to think about permanent life insurance is. As the name suggests, it is a type of life insurance designed to last your entire lifetime. Permanent insurance provides coverage for life* while term insurance is coverage for a fixed or temporary period. Term and permanent insurance each provide unique features designed to meet different needs.
There is a certain level of comfort in knowing insurance coverage will be there for the long term and depending on the policy features, some plans provide additional value either in the form of increased coverage or accumulated cash value.
We often discuss the financial impact of passing away and strategies to mitigate the financial impact for our loved ones. Permanent insurance is one way to do this; it can help cover expenses like funeral costs, income replacement, living expenses, outstanding debts and final estate or tax costs. Every person’s circumstance and needs are specific and insurance protection is designed to account for the differences.
Common reasons to start thinking about putting a long-term insurance plan in place include:
- You have people who are financially dependent on you
COVID-19 has created an environment where concern for loved ones and our own personal health is top of mind. It has also demonstrated to us that we cannot control the future which makes planning ahead for the unexpected, more critical than ever. If you have young children, a spouse or other family members who rely on your income, life insurance addresses survivor income needs. With permanent insurance, you have the comfort of knowing those who depend on you financially will have the protection they need when they need it the most.
2. You want to leave a legacy for your family
Estate plans are very personal and unique to everyone and they take time to set-up and maintain. This means talking about your long-term goals and plans now with your financial advisor can help prevent future stress and worry in an already stressful situation. Many estate plan goals include gifts to family and the desire to preserve wealth and grow the family legacy. Often, a well thought out estate plan includes permanent insurance as one of the tools to protect the wealth you have worked hard to build. It provides a way to transfer assets to your family outside of your estate so it goes directly to your beneficiaries.
3. Looking for tax-efficient investment options
Many investors may not consider cash value life insurance as an investment option because they aren’t aware of how it can be used to grow investments within a policy and help support financial goals. Life insurance in a portfolio of assets can be used to build long-term growth and maximize estate value. If you have a need for permanent life insurance and want the flexibility of building cash values on a tax-deferred basis, doing so via life insurance could be good fit for you.
For the people wondering when a good time to think about permanent life insurance is, our answer is now. Your financial advisor can conduct a Needs Analysis to understand your new and ongoing needs and goals and help determine if permanent insurance makes sense for you, presently or in the future.
Connect with us to review your plans and ensure they continue to best fit your needs.
*Permanent policies are subject to policy age limits – most policies are to age 100 or higher.