The Perfect Policy
A Comprehensive Life Insurance Buyer’s Guide
Most life insurance agents and financial planners come from a different — a “father knows best” — era, when fear-based sales tactics ruled the day, motivating you to buy life insurance (right now!) based on emotion instead of teaching you the real value of life insurance.
Buying something like life insurance out of fear, guilt, or some other emotion and rationalizing it after the fact is… not a great idea.
For one thing, it often leads to you buying insurance for the wrong reasons. It also causes you to become short-sighted, which always negatively impacts your overall financial plan.
And yet, this short-sighted life insurance planning model is the norm in financial services.
Enter, this guide.
It takes a fundamentally different approach — a reason and value-based approach — which integrates with your already-existing behavior, psychology, and emotions surrounding money.
This guide contains never-before-seen-on-the-internet information from life insurance textbooks, original as well as third-party research, industry statistics, real client stories, policy illustration samples, and interactive financial calculators that you can “play” with to get a better sense of how these intriguing products really work.
You’ll learn how to benefit from your life insurance policy over the long-term, how to cash in on a term life insurance death benefit before you die (without getting sick or becoming disabled), and how to properly use permanent life insurance to finance all your major expenses and provide a stable and secure income later on in life.
It doesn’t matter whether you’re in the market for term insurance or permanent life insurance. All types of policies can pay cash benefits after you die as well as while you’re still living.
Are you ready?
Then, let’s get this party started with the most frequently asked question…
DO YOU REALLY NEED LIFE INSURANCE?
Is life insurance really that important? What does it all mean, and… why? And… if you do need it, how much should you buy?
The answer is found in the remarkable story of your Human Life Value…
LIFE INSURANCE POLICY BASICS
Not really sure how life insurance policies work?
No problem. Here, you will learn all about the basics, including what all that technical jargon means, why paying your premium is important, what your death benefit means, how to choose beneficiaries, and the fundamentals of how a life insurance policy works for you, both while you’re alive and after you die.
BASIC PRINCIPLES OF LIFE INSURANCE
See The “Big Picture” By Observing The Smallest Details
Want to know more about why life insurance works the way it does?
… What do insurers do with your premiums, anyway? And… how can insurers sell these products and remain profitable when everyone eventually dies? Is your life insurance policy guaranteed to pay out or is it driven by non-guaranteed assumptions?
This section goes beyond the basics of how life insurance policies work and explains the underlying principles that make life insurance possible.
THE UNDERWRITING PROCESS
How does the life insurance company figure out how much your premium is?
They do it using a sophisticated process called “underwriting.” If you want to know more about this process and how to get the lowest cost of insurance for your next life insurance policy (OR… reduce the cost you’re paying for an existing policy), pay attention to this section.
ALREADY UNDERSTAND THE BASICS?
IF SO, THEN LEARN ABOUT THE DIFFERENT LIFE INSURANCE POLICIES AND HOW THEY WORK…
TERM LIFE INSURANCE
PURE LIFE INSURANCE PROTECTION WITH LEVEL PAYMENT OPTIONS
Pure as the driven snow. Term life insurance has a reputation for being simple, but most of today’s term life products are a combination of level premium and annual renewable term policies which are (in turn) part of a larger, more complex, savings and investment strategy.
Premiums for this type of insurance start low and are guaranteed to increase over time. Good news is most term policies have a guaranteed level premium-paying period before premiums increase.
The bad news is, because term insurance does not build a cash value, you must save money on your own and grow that savings enough to replace the term policy before premiums increase.
For some, this seems like an easy task. For others, it’s near-impossible.
Want to know whether term insurance makes sense for you?
UNIVERSAL LIFE INSURANCE
a combination of FLEXIBLE term life insurance and a NON-GUARANTEED cash VALUE account
More flexible than a gold-medal gymnast. Universal life insurance is a complex, flexible premium, life insurance product which combines term life insurance and savings (or investing) as two separate functions within the same contract.
Premiums for this type of insurance can start out low or high. Premiums may increase or decrease dramatically over time depending on guaranteed and non-guaranteed interest earnings and non-guaranteed mortality and expense charges.
But wait, there’s more!
The policyholder can also choose to increase or decrease premiums at-will. As a result, the insurance company shifts some of the risk of insurance onto the policyholder while retaining the right to increase internal policy charges at its discretion.
This type of insurance policy also builds a non-guaranteed cash value which can be used while you’re alive, for any reason.
Want to know if universal life insurance makes sense for you?
WHOLE LIFE INSURANCE
a combination of pure insurance and guaranteed cash value
Like a faithful dog. Whole life insurance is the original form of permanent life insurance, combining decreasing pure insurance and increasing guaranteed cash value (savings).
The result is a life insurance policy with a guaranteed level premium, guaranteed level death benefit, and a guaranteed increasing cash value that’s always there for you when you need it.
Premiums for this type of insurance generally start out higher than universal life insurance, but are guaranteed to never increase. In some instances, they can decrease either temporarily or permanently.
The cash value can be used while you’re alive, for any reason.
Want to know if whole life insurance makes sense for you?
WANT TO SEE THE NUMBERS?
If you’re a number-crunching nerd, or if you’re just curious about the technical details and want to see how life insurance works “under the hood,” then dive into our unique online life insurance calculator and analyzer tool.
Build a hypothetical life insurance policy and learn how it works… even if you know nothing about spreadsheets or finance. Design a life insurance, savings, and investment strategy and see — in real time — how each component affects the other.
THE TRUTH ABOUT INVESTMENT RETURNS
Should you buy whole life insurance or buy term and invest the difference? Or, should you do a combination of both?
How much can you really earn on your savings, anyway? How are investment returns calculated, and why?
What kind of return should you expect if you invest in index funds versus actively managed mutual funds? What is the average return of most investors and… why do they earn those returns?
This section simplifies an inherently complex topic and helps you set appropriate expectations about how much you can realistically earn on your savings, which… will help you determine how much money you should be saving (and insuring) for your future.
Want Help With Your Existing Life Insurance Plan Or Need Help Designing A New One?
If so, consider becoming a client.
The first step is to get on the waiting list. You’ll be notified when there’s an opening in my schedule so you can schedule a pre-client interview. This purpose of this is to determine whether I can help you and it also gives you a chance to speak with me before committing to anything.