Are you? Or is your family going to be burdened with the cost?
This is the question that all seniors think about from time to time. Some have prepared, some always say they will eventually, and then some ignore it. There are a lot of life insurance options to mull over when preparing for your retirement, you have age, sex, health, geography, whole life, final expense, term life, UL etc. and the list goes on.
Just know that your BGA agent can guide you through this process so it may be a good idea to reach out if you have not done so. As a matter of fact, you should reach out regardless for a free life insurance review and let me tell you why.
First reason is you could be over-paying for your life insurance. And I am not understating that point. For example, let’s say you purchased a whole life policy 30-years ago, chances are you have built up quite a bit of cash value and continue to pay the premiums, so you don’t lapse your insurance. Your premiums may have increased also.
In a lot of cases after I help someone through a review, we find that the cash value that you have accumulated over the years can buy you a new policy (single premium) with the same death benefit but no more monthly or yearly premiums. How about that? I am sure at this point in your life you wouldn’t mind keeping those premiums in your bank account.
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These are the things your current life insurance carrier will not tell you because you continue to pay the premiums and they are happy that you continue to do so. Right now, I am handling a case for a client who purchased a whole life plan back in 1991 and the death benefit is $40,000 and his monthly premium is $39 a month.
After looking at this cash value, which is $18,000, we can get him a policy for a $38,000 death benefit and no more premiums out of his pocket. He even said to me that the $39 was not putting him in a financial bind but would rather keep the money in his wallet.
Another example could be that your goals have changed over the years. Maybe 20 or 30 years ago the death benefit you decided on is no longer needed. Maybe you just want to lower the benefit to a more reasonable amount and lower your premiums.
It is easy to do so. It is just a matter of a phone call to determine what your goals are whether you need to leave the benefit to your beneficiaries, pay off mortgages or other expenses, or college tuitions that no longer exist. There could be a myriad of other reasons, but the years have gone by so fast you never really thought to review your coverage.
There are times when I sat down with someone and they show me a letter that they just received from their current carrier that their premiums are suddenly going to increase in order to keep their life policy active. Most of the people who are in this position did not plan for this because they were mislead years ago.
There were times there were dishonest life insurance salespeople who sold their prospects policies with super low premiums to look attractive to the buyer. They failed to tell their prospects that their premiums would increase down the road to keep up with the age and death benefit ratio.
And what did the salespeople care, they knew they wouldn’t be around 20 years down the road to answer to their dishonest practices. It is a shame that this happens, but it can be fixed or adjusted with a life insurance review.
Those are just a couple of good examples.
How about if you never prepared at all? Yes, it does exist, and it does put financial pressure on surviving loved ones. At this point in a senior’s life, they may not require a large death benefit, they may just want enough to cover death expenses.
That could be anywhere from $10,000 to $25,000. With that said, you are not looking at an expensive policy, good chance the monthly premium fits into your budget. Most of these final expense policies can be approved for coverage before we walk out your door. How great can that be for your peace of mind?
Have your children prepared? A lot of times we go through life with the everyday stresses and just never get to prepare for them. Most young people who are getting started are having children and buying homes of their own. What happens if the primary income earner suddenly passes away?
How does the mortgage get paid? How does the income get replaced? These are the concerns that need to be addressed before they get too expensive or before it’s too late. In a lot of cases a low-cost term life policy can ease those concerns. Another great option for a younger person is a Guaranteed UL policy where they can plan for tax-free retirement planning through their life insurance policy. The great thing about building cash value through a life policy is that you can borrow money tax free and use it as a retirement tool. I placed a policy with a client’s son about 8 years ago. At the time he was 40 years old and he wanted a death benefit of 400,000 to leave to his wife and son in case of his passing.
We worked it out where he is overfunding the policy through his premiums so that way the death benefit stays intact, but it is also building a significant amount of cash value at the point of his retirement at age 65 years old. At that time, he should realistically have about $400,000 to $550,000 of cash value accumulated that he can borrow $30,000 a year as tax free income.
How great is that?
As a life insurance agent, I did the same exact planning for me, my wife and my daughter. In the case of my daughter, I purchased her a policy when she was 8 years old and am overfunding the premium at only $100 per month. That $100 pays for her death benefit and builds her cash value.
At the point when she graduates college and starts her own career, she can resume paying for the policy at that $100 a month low price and have her $300,000 death benefit and build a significant amount of cash value for her retirement by the time she turns 65 years old. At that point, the policy illustrations show hundreds of thousands of dollars accumulated.
As you can see by these few examples there is a valid reason to review your current life insurance or to talk about your retirement planning if you haven’t already done so. The process is not difficult and not time consuming at all. Is it possible you could save yourself a lot of money?
Is it possible you can make the proper changes to adjust to your current goals? The answer is yes for just a few minutes and a couple of questions. You already allowed your BGA agent to save you money on your Medicare plans, allow them to properly review your life insurance goals.