Hi everyone, Jeff Beck here with The
Tranel Financial Group, hope everyone
is doing well today. I just wanted to
talk today a little bit about life
insurance, right, something in general
that most of us aren't thinking about
when things are going well we try not to
think about that negative stuff that
could happen, unfortunately, with this
COVID-19 pandemic we're going through
it's a little bit more top of mind for
people right we start wondering what if
this happens what if that happens what
if it's me right that kind of stuff and
so we're getting a lot of phone calls
and having a lot of conversations with
people about really how do I make sure
that my family's protected or my loved
ones are cared for god forbid something
did ever happen to me.
So life insurance is obviously a great
way to be able to protect your family
and loved ones if something you know did
happen to you, so really I'm just gonna
break down really the two main types of
life insurance right there's many
different kinds and and spin-offs of
certain types but really just want to
talk about the two main types of life
insurance. Which are term insurance and
whole life insurance. So for term
insurance right think of it just like
any of the other insurances that we have
currently right if you have home
insurance auto insurance it works very
similarly, we pay a certain premium right
you could pay it monthly, you could pay it in
full once a year and basically what it
does it gives you a coverage for that
time period as long as you continue to
pay the premium you have the insurance
right if you're continuing to pay your
home insurance god forbid your house
burns down right insurance company comes
in and they're gonna take care of the
cost right depending on how your
coverage is set up right they cover the
cost of that home so you can buy a new
one build a new one etc right if you
stop paying your home insurance you
wouldn't have coverage anymore something
happens you'd be liable to pay for a new
home again to move to rebuild etc so as
long as you're paying it you're covered
at the end of that term right whatever
it might be let's say you have home
insurance for 30 years your house
becomes paid off if you stopped paying
it
and you don't have coverage any longer
and you don't get any of those premiums
returned to you right you're paying that
premium for the peace of mind and the
safety that if something happened you
you would be covered right your house
would be able to be paid off again or
build a new one etc so that's really the
same way term insurance works. In general
you would buy it in either 10, 20 or 30
year terms and you have a premium based
on your age and your current health you
pay that premium on going, like I said
monthly or yearly however you choose to
do that and you basically have coverage
for that term. So if you do a 30-year
term you pay your premiums for 30 years
if anything happens to you right the
death benefit is then left behind to
your family, to your loved ones if
nothing ever happens in that 30 years
right yeah you continue to live a
healthy lifestyle, nothing happens after,
right after that there's no return of
premium there's no investment nothing
else that would be a part of that you're
just covered for that period and that's
all for some people you might say well
why would I do that if there's another
option well the biggest reason it's the
cheapest type of insurance right for the
smallest premium you can pay you can get
a decent face value write a decent death
benefit and be covered for a certain
period of time. The second type of
insurance the second main type is whole
life insurance and really the point with
that is it is an ongoing basically an
investment that you have so you continue
to pay premiums you have a face value; a
death benefit if something were to
happen this insurance last forever
though there is no 10, 20 or 30
year term it basically is an ongoing
insurance policy for as long as you live,
so that's a really neat benefit to it
and as you're putting in those premiums
right they begin to build cash value
inside the policy there's usually some
sort of fixed interest rate with those
premiums and they continue to build so
maybe you pay that for 30 years and at
some point you say well hey we actually
have saved up enough elsewhere we don't
really need this
coverage anymore you can stop paying the
premiums right and there will be some
cash value that's accumulated in that
policy that you can then take out and
utilize for anything you might want so
there's there's cash value that builds
you're not throwing away your premiums
over time if you will, but it is a much
much more expensive insurance so to get
the same type of coverage that you would
have for a term policy it could be 5, 7, 10 times more expensive to have
that same type of coverage. So there are
some benefits to each of them and really
it just depends on your particular
situation which one makes the most sense.
So I just wanted to give you a little
background on each of them. I didn't
go through every single detail of them,
but I just wanted to give you a little
snippet so you have somewhat of idea of
how they work and again if you have
additional questions or things that you
want to go through see if either of
those are a good fit for you just give
us a call let us know myself or one of
our advisors would be happy to sit down
with you and see if it makes sense to go
that route. Like I said there's a ton
of different types out there there's a
lot of feedback on insurance whether
it's good or bad. At the end of the day
as I tell everybody right nothing is
perfect for everybody there are certain
situations where it works really well
and you just want to make sure you're
utilizing the right type for your
situation.
So again hope that is helpful to get a
little information on life insurance and
if you have additional questions please
let us know, but hope everyone is doing
well and take care, thank you.
