Life Insurance
It's never too late or too early to
think about protecting your family's financial future.
Life insurance is protection against financial loss resulting from death. It is an insurance company's promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.
Why do I need life insurance?
Although you may not think about it, your ability to earn income is a significant asset and life insurance helps replace lost income in the event of your premature death. Here are some reasons people buy life insurance.
The death benefit may be used:
- To replace income the family would need to maintain their standard of living after the death of a wage earner.
- To pay off a mortgage loan and other personal and business debts or to create a rent fund.
- To create a fund for children's education.
- To pay final expenses, such as funeral costs and taxes.
- To create a family emergency fund or a fund for a family member with special needs.
How much life insurance do I need?
The Rex Young Agency can provide a way to get an estimate of the cash needs you may have at death. Cash needs that exceed your available assets can be covered by life insurance. “I want to be your agent for LIFE”
Term or Permanent: Which is best for you?
Generally speaking, there are two categories of Life Insurance, Term Life Insurance and Permanent Life Insurance. Often, the solution is a combination of both, since most people have a need for both temporary (term insurance) and lifetime (permanent insurance) protection.
To help you decide, consider four basic factors:
- Death benefit
- Duration of coverage
- Premiums
- Cash value
Death Benefit
Permanent life insurance provides a death benefit for as long as you live.
Term life insurance provides a death benefit for a stated period of time.
Duration of Coverage
The longer period of time that insurance protection is needed, the more consideration you should give to permanent life insurance. For short-term needs, term life insurance may be appropriate.
Examples of permanent needs are:
- Financial needs of loved ones
- Final expenses
- Contributions to charities
- Estate taxes
- Business needs, such as supporting a buy/sell agreement or providing key person protection
Examples of temporary needs are:
- Educational expenses
- Home mortgage
- Automobile loan
Premium
Permanent life insurance premiums are generally level and payable for life.
Term life insurance premiums will increase over time, are payable for a specific period of time and generally increase at each renewal.
Cash Value
Guaranteed cash values can provide money later to help with temporary needs or emergencies.
Permanent life insurance accumulates guaranteed cash values and may be eligible for dividends:
- The growth in cash values is tax-deferred under current federal income tax law.
- You may borrow against the cash value as a policy loan at the current policy loan interest rate. Borrowed amounts reduce the death benefit and cash surrender value.
- Amounts withdrawn that exceed the cost basis of the policy are federally income taxable.
- Dividends are a return of premium and are based on actual mortality, expense, and investment experience of the company.
- Dividends are not guaranteed, since actual experience is not known in advance.
How to choose
Together, you and agent Rex Young can assess your Life Insurance needs to help you choose the coverage that is best for you.
Contact Rex Young for additional information or if you have any questions. Rex Young can also give you details on cost, coverage and restrictions
