Many clients tell me right away that they want $100,000, $500,000, or a Million dollars of coverage. When I ask them why they chose that amount, their most common answer is ‘I don’t know’. They had just picked a figure out of thin air.
As a Full-Service Life Insurance Broker, I want to help guide you to make the right choice, so I begin asking you questions. The first thing I want to know is if you are looking for coverage for Final Expenses, Mortgage Protection, to leave a Legacy for their family, or for business Key Man Coverage. Each category you choose leads us in a different direction.
Along with your choice are the factors of age and health. Then I can begin to narrow our search to the amount of coverage, and whether you need Whole Life, Term Life, or Universal Life Insurance. (See my Blog – What Is The Best Life Insurance For You). Generally speaking, here is an overview…
- Final Expense – If this is your need then I identify if you are thinking of cremation or traditional. Cremation costs are between $800 and $3500. So, I generally recommend a $5,000 policy because there are always extra costs. If it is traditional, the costs will range from $8,000 to $12,000. Here again, there will always be extra costs, so I recommend a $15,000 policy.
- Mortgage Protection – Let us use an example of a $150,000 balance on your mortgage. If the client is young, they can probably cover the entire amount, and we can use any of my products to accomplish this. The least expensive is a Decreasing Term product that decreases along with the mortgage. But there are advantages with the other products as well.
If you are older then you may not be able to afford to cover the entire mortgage balance. In that case I recommend covering at least 8-12 months of your mortgage payments. That gives the surviving spouse time to find a solution like refinancing, getting a reverse mortgage, or selling. This is very important because you may have $50,000 in equity or more and you do not want the bank to take the home back – you would lose that equity.
- Legacy – Often clients want to leave the tax-free Life Insurance money to their family just to help them along. In that case it can be for your spouse or an equal split between the children or grandchildren. It can also be left to a charity or trust account.
Whatever your needs or desires, I am here to serve. Contact me.