William Penn Life, 2018 (53. évfolyam, 1-12. szám)
2018-04-01 / 4. szám
Moneywise with Bob Bisceglia, Notional Soles Director Young families & life insurance myths WELCOME SPRING! Seeing all the flowers starting to bloom around the Home Office, I thought I'd dedicate this month's Moneywise to "blooming" families. Young couples who are just getting started often feel like their future is limitless. But, that future comes with a long list of new commitments, such as having children and purchasing a home. On top of that, young families face the responsibility of making sure their loved ones will be taken care of financially-no matter what life may throw at them. If the couple should die prematurely, life insurance can help their family maintain their standard of living and follow through with their plans for the future. Here are some common misconceptions that may discourage young families from getting the life insurance coverage they need: MYTH #1: We only need life insurance on the primary (or only) breadwinner in the family. Whether you bring home the largest paycheck in your family or the smallest one, your family relies on your income, and it would be missed if something were to happen to you. Even if you don't work outside of the home, you still need life insurance. Stay-at-home parents perform valuable services, such as childcare, cooking and maintaining the family household. Consider the cost of a full-time nanny, cleaning service or daycare facility, and you'll begin to see how valuable those services really are to the maintenance of the family. These services can be quite costly to replace. MYTH #2: We only need term insurance. Term life insurance makes sense for many young families in that it gives you the most protection for the smallest premium cost-and it's much easier to fit into your budget. But, that doesn't mean that's the only type of insurance you should consider. Permanent (or whole life) insurance provides a death benefit as well as other features, such as lifelong protection and the ability to accumulate cash values on a tax-deferred basis. You can access the cash values for family emergencies, college education or business opportunities. If these features are important to you, then it might make sense to purchase a combination of whole life and term insurance to get the protection you need as well as the tax advantages of the whole life certificate. Then, as your needs change and your budget can sustain more premium commitment, you can gradually increase the amount of permanent coverage by converting your term to a permanent plan. MYTH #3: If we still need insurance at the end of the term, we can just renew my policy. Term insurance is quite popular with young families because, as I mentioned earlier, it typically offers the most coverage for the lowest cost. Term insurance provides Photo © Can Stock Photo/ monkeybusiness a specific amount of insurance for a specified amount of time (the "term") and helps cover the needs that will reduce or disappear over time, such as a mortgage, child care and education costs. However, many families come to realize that, even after the kids are grown and the mortgage is satisfied, their need for insurance coverage continues; it can help eliminate debts and provide a continuing income for the surviving spouse. Because premiums increase with age, renewing your certificate when the term expires can be quite expensive. This is a great reason to consider converting at least a portion of your term insurance to permanent coverage before the expiration of the term period. Myth #4: We can get a better rate of return by investing our money elsewhere. While the most important reason for owning life insurance is to provide ongoing income protection for your family, permanent insurance certificates will provide you with the ability to accumulate cash values that continue to grow over time and can be borrowed against or withdrawn. Contrary to what many people believe, long-term rates of return on the cash value of your life insurance certificates are generally comparable to other low-risk investment products. Rates of return can be hard to understand, that's why the best way to find solutions to your needs is to consult with a full-time insurance professional. Are you about to be married? Are you a newlywed who is planning to start a family? Will one of your children or grandchildren be starting a family in the near future? If you answered "yes" to any of these questions, then don't let these myths derail your plans for getting the coverage you or your loved ones need. Now is the perfect time to call on your WPA agent or broker. We can help you determine the best type of coverage at a price you can fit into your budget. Don't have an agent? Give the Home Office a call. We'll be glad to help or assign a local agent to your account. We're here to help! □ 4 ° April 2018 0 WILLIAM PENN LIFE
