Life insurance is one of those taboo subjects for normal,
casual or friendly conversation. Whenever people, however,
develop a life threatening illness, have a close encounter with
another vehicle on the highway, or otherwise find themselves in
a situation where they are likely to be rated or declined by an
insurance company, they suddenly develop a desire for a good
life insurance policy. To give credit where credit is due, there
are some thoughtfully disciplined people who give their
portfolios regular review and make certain they have adequate
coverage at all times.
I want so much for all people to
think like the disciplined ones. In my career as a life
insurance agent I bent backwards to persuade such people to keep
their life insurance up to date. I have seen the difference
between an adequately insured breadwinner at death, and one who
barely had enough life insurance to bury him. The latter
situation is quite painful to observe.
I, therefore,
think it is imperative that everyone take the time to evaluate
and understand what life insurance really can do. Ask yourself
this question, "do I need life insurance and why do I need it."
If someone, be it your wife, your children or your business
partner, depend on you in any way that can be seen as a
financial dependency, then you do need life insurance. In the
case of premature death your family will need money to pay your
last expenses, like outstanding bills, funeral expenses,
attorney's fees, medical bills and estate taxes. The businessman
will need life insurance to fund a "buy sell" agreement, to pay
off outstanding debt, or may be to keep the company afloat while
they find a replacement for a deceased valuable employee.
I implore you to look at the following situations which will
help you decide whether or not you need life insurance. So just
try to relax and objectively as you can evaluate the situation
for yourself.
One Parent Only Working
The
most devastating situation occurs when one parent works and the
other stays at home. Should the working parent die at a time
when there are insufficient funds for the survivors to continue
living in the manner to which they have become accustomed, then
they may have to sell the house. The comforts which they had
enjoyed for years would totally change. The minimal requirement
is sufficient funds which would allow the survivors to adjust
their lifestyle.
The ideal situation is to have
sufficient funds which would allow the surviving parent not to
work at all, during the formative years of the children. They
can live in the same house, they can continue in the same
school, and when the time comes to enter college, they go to the
college of their choice.
A good insurance policy is an
excellent tool that you can use to take care of these things.
Both Parents Working
In todays world, in most
families, both parents work and share the expenses. If one
parent should prematurely die, would the income earned by the
surviving parent be sufficient for the family to live on?
Probably not. In anticipation of that possibility a fund could
be set up, through an Insurance policy, to replace, totally or
in part, the deceased parents income.
Single Parent
Maintaining Family Alone
In the case of a single
parent, all the financial responsibilities for the family may
lay on his or her shoulders. If that parents died while the
children are still in school, how will the children survive?
Partnership Or Corporation
Let us look at the
situation where you own your own business. You have one partner
or several partners. One partner dies. Is it not fair that the
surviving partners should own the business and the deceased
partners family receive full value for his or her stock?
Adequate Insurance coverage can take care of this eventuality
also.
It may be desirable by all parties concerned that
the beneficiary of the deceased partner become a full and active
partner, if this is the situation then the funds can be used as
a cushion while the new partner or shareholder learns the
business and adjusts to his or her new role.
Key
Employee
Some employees are difficult to replace. It
may take some time to get a replacement up to the production
level of your long time, well seasoned and highly efficient
employee. If your business depends a great deal on a particular
key employee, would it not be wise to insure that employee in
case he or she should die suddenly? The company would receive
the death benefit in this case, and the money would be used to
keep the company afloat, while a replacement is found and
trained.
About the Author:
For more than 40 years Donald has been known for his extensive
knowledge of the life insurance business. He has studied the
work of all of the greats from Ben Feldman and Frank Bettger to
Joe Gandolfo. He has represented some of the largest and best
life insurance companies in the United States as well as Canada.
http://www.lifeinsurancehub.net
