Life insurance is unique among the products Spickelmier Insurance Agency deals with, in that it’s the only type of insurance that pays a benefit to beneficiaries rather than the insured. In many ways, it would be more accurate to think of it as “family insurance” — insurance to ensure that your loved ones won’t be financially crippled by your unexpected passing. At Spickelmier, our independent Jacksonville insurance agency is here to help you find the right life insurance coverage to fit the needs of you and your family.
Replacing a Life
For the majority of our clients, it is easiest to think of life insurance as a source of income replacement. In other words, if you were to have an accident tomorrow and were no longer able to provide income:
- How much will it cost them to deal with your death in an immediate sense; including funeral costs, paying off outstanding debts, the home mortgage and so on?
- How much income is your family counting on you bringing in over the next several years until your youngest dependent turns 18?
- How much will it cost to send your children to college? (Optional)
The answers to those questions should form the basis of your approach to life insurance. Simply put, there is no tool in the world that can help a family deal with the emotional and personal stress caused by an unexpected death — but life insurance can, at the minimum, ease the financial stress.
Term Life vs. Whole Life
The ongoing debate in the world of life insurance is whether it is better to put money into a product that you hope to fervently outlive and thus have ‘wasted’ all of that money or to put money into a product that costs more, but is permanent and can become a valuable asset over time.
Whole life insurance is a permanent policy in which a portion of the premium is used to build up cash value. For this reason, it is sold as an investment vehicle. However, some argue that it underperforms other investment vehicles on the market.
Here are some reasons a person may benefit from a whole life policy:
- If you lack financial discipline and know you would never invest the difference in price between a whole and term life policy, this may be the right vehicle for you.
- If you are entirely risk-averse and cannot stomach a small chance of losing your money in an economic collapse, a whole life policy is the closest thing to an absolute guarantee of return on the market.
- If you have already had a whole life policy for a several years, you should stick with it.
- If you need permanent life insurance to cover basic funeral and burial costs, you should at least consider a small whole life policy (such as $10,000 to $15,000).
On the other hand, term life insurance is beneficial if:
- You are on a tight budget and cannot afford higher monthly or annual premiums.
- You need to secure the highest coverage levels possible but only need this coverage for a limited number of years.
- You are confident that your other investments are building the assets you will need as you approach your retirement years.
There are a number of options for whole (permanent) life insurance as well as term policies depending on your individual circumstances. The good news is that life insurance premiums continue to drop as life expectancies rise. If you have not looked around for a while, you may be surprised at how affordable it is to protect your family from the worst case scenario. At Spickelmier, we work with several of the top local and national insurance carriers to find the life policy that best fits your needs and budget. Contact us today at (904) 471-7155 or stop by our office to learn more.