Eagle Eye Contents — Fall 2003

The current trend in the life insurance industry is selling more term insurance. With term life insurance you pay a premium for a policy for a certain period of time, usually 10 or 20 years and if you are lucky enough to die while you are paying the premium, your loved ones get paid. If you die after the policy term, you get nothing. All the statistics show that people are living longer and will likely out-live their coverage.

So . . . .

• Do you want your life insurance in force when you die?
• Is there a chance that you might need some or all of this coverage for more than the traditional 10 or 20 years that term polices are in force?

What is the probability of surviving...

Permanent life insurance, “traditional” whole life and universal life products, have a cash value component that invests a premium in an investment vehicle to build a cash value that can be used to borrow from or, in some cases, pay the premium owed. The real value of permanent insurance is that the policy can be paid up in full and stay in effect until you die. You can also cash the policy in for any cash value that has accrued from what you have paid in and interest received from investments the company has made.

The only really good life insurance product is one that is in place when you die. The “real cost” of term insurance is NOT having the coverage in-force when you die.

Perhaps you should consider a combination of term and permanent insurance, in case you live longer than expected . . . and we hope you do. At certain times of our lives we have different obligations and needs for our loved ones. When we first start families or begin our own businesses, if we were to die unexpectedly, the need for dollars to continue the lifestyle our families have or the continuation of the business may be greater than when we are retired. Additionally, if you die sooner than expected, how will the mortgage be paid, college for the kids, estate taxes, expenses for a spouse who has matured in age and survives you, and of course final burial expenses.

Life insurance is an important funding mechanism for investing and protecting assets for your heirs.

The solution . . .