Speros Financial Life Insurance Tip Of the Day

 Speros Financial Life Insurance Tip Of the Day

#LifeInsurance is probably one of the most misunderstood financial products sold today. I think most of us understand it pays our beneficiaries if we die. The confusion comes when we have to choose what type and for what reason.

The prices for life insurance coverage can range all over the spectrum. The consumer can be at a real disadvantage if they don’t do some basic research. Here are essential tips you need to know to make smart decisions on buying life insurance for you or your family.

• Review every year: Beware of having an independent broker review your policies. They will try to get you to change your policy every year, saying they will save you money, but in reality they make money every time then change to something new.  Contact your if you aren’t meeting with him regularly and have him make sure you are up to date.

I do have one message of caution: If you own a cash value policy, switching every five to 10 years will not help you either. You should review your policies for loans, cash values, beneficiaries and current insurance needs.

• Know your type: There are two major types of life insurance: term and permanent.
Term is the cheapest and pays only if you die. There is no cash value buildup. It is often sold for five-, 10-, 15-, 20-year terms.

The premium and death benefit types stay level for the length of term.

You can keep the same coverage or reduce it when you covert to a permanent life policy at the end of the term period. You will pay a higher premium but you can keep your coverage until death if you want. That is the best choice for young families who are not saving enough in their 401k.
Whole life you usually pay the same premium, the death benefit increases every year until death, and it creates cash value.

Universal life is a combination of term and whole life. The premiums and death benefit are usually flexible.

• Benefits: Most of the time, the death benefit proceeds are tax-free. As long as your premiums are paid with after-tax money, the death benefit should be tax-free.

I recently talked with a widow, and she was surprised she did not have to pay taxes on her husband’s life policy death benefit through work. Life insurance creates an immediate pile of cash when somebody dies.
It is hard enough to go through the loss of a loved one; it is even harder knowing you have no money to support you and the children.

There are other situations that require advanced design for estate planning, wealth transfer and business succession plans. I hope all of the above helps you make smart decisions about your life insurance

Vasilios "Voss" Speros 602-531-5141
480-840-2000 #new #york #life
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— in Phoenix, AZ.