Do You Have Enough Life Insurance in New Berlin?
Most people in New Berlin understand the importance of insuring their lives. When you have a family to take care of, they need to be protected in case you can no longer be there for them, and insurance is one of the best ways to do this. But how much insurance do you need and what kind of policy is in your best interests? The truth is, you have three basic options, which are whole, term, and universal life insurance, and one will be the right option for you. Let’s take a closer look at all three.
Whole Life Insurance
A whole life policy is designed to last for your whole or entire life. When you take out the policy, it gradually increases in value over the years. Eventually your policy becomes an important financial asset as you can borrow against the value or cash in the policy. In addition, your life is insured the entire time the policy is in force.
With some whole life policies you can put your dividends toward your premium payments or use it to purchase more coverage. This is a long term financial commitment that pays off more the longer you keep it. Once the policy is in place, you cannot be canceled if you develop poor health in the future, and your rates will not increase either.
Term Life Insurance
Term insurance is sometimes called “pure insurance”, because there are no added benefits except insuring your life. For example, your policy is designed to run for a specific term or amount of years, and during this time you pay premiums and your life remains insured for the value of the policy. During the term of the policy, your rates cannot increase. This is the most cost effective option.
Universal Life Insurance
A universal policy is sometimes called adjustable coverage, because you retain the option to lower or raise the death benefit once the policy is in force. However, you may need to pass a physical in order to do this. In addition, you can be flexible on your payments, as you can choose monthly or lump sum payments.
A universal policy is similar to whole life, because your premiums (minus insurance cost) are invested and you receive dividends. These dividends are tax deferred and increase the value of your policy. If your policy’s cash value is sufficient to cover premiums, they do not have to be made.
Some people take out universal life policies for their flexibility, because if you have financial problems, you can lower coverage, not make premium payments, or cash out the policy.
Do I Really Need to Insure My Life?
If you have other people depending on you, it makes sense to have insurance in case the unexpected occurs, unless you have sufficient coverage through your employer or other sources. These people may need insurance or additional insurance for their lives:
- Guardians and foster parents
- Company executives
- Business partners
- People taking out large business loans – you may need to name the lender as beneficiary, in order to qualify.
- People with mortgages and car loans – simple term policies can protect you.
How Much Insurance Do I Need?
You may need more coverage than you think. Here is a way to get a good idea of your needs:
- Figure out your assets
- Add up all liabilities like loans and mortgages
- Determine how many more years you will be working and take that amount times your projected annual income.
- Add up your projected income and include your total liabilities. Next, subtract your assets like paid off vehicles and home equity. If you already have insurance on your mortgage, you can include the total home value as an asset.
This should give you a reasonable estimate. Of course, the best way to determine your insurance needs is to talk to an experienced insurance professional.
Where is the Best Place to Buy Life Insurance in New Berlin?
When you need insurance assistance, you can turn to your independent agent at American Advantage – Petersen for help. We are not employed by an insurance company. As an independent agency we are partnered with many excellent insurance companies that will fit your need.
We have been in business for over 40 years and are proud of our personal services. You have help choosing the right policy and when you need to make a claim, we can assist you. Let American Advantage – Petersen help you find the life insurance policy for your needs. In addition, we can save you money on auto, home, and business insurance. Call us toll free at 888-302-4288 for more details and you can visit us online for a free, no obligation insurance quote. Fill out the quote form and we’ll get back to you.