Ask the Expert: Protect your loved ones

I am often asked, “Who needs life insurance?” My answer, just about everyone. New home buyer? Absolutely. New parents? You bet! Grandparents? Yes. Recent college grads? Yes, again.

We all want to protect our loved ones and prevent hardship if we can after we are gone. Life insurance is an easy way to do just that.

The next question I get asked is, “How much do I need?” Well, everyone’s circumstances are different, but a good rule of thumb is at least 10 times your annual income, and, again, depending on your circumstance, here are the options to choose which best fits your needs.

• Whole Life – Insures you throughout your lifetime (as long as premiums are paid), builds cash value, and the premium costs remain the same.
• Universal Life – A permanent insurance like whole life, but with a twist. You can tailor your policy to meet your ever-changing needs with flexible premiums and face amounts.
• Term Insurance – The least expensive, has no cash value, yet premiums remain the same for a specified period of time—typically, 10, 20, or 30 years. When the term ends, the policy ends.
• Term insurance with return of premium (ROP) – With 20- or 30-year term policies, if you outlive the policy term, you get your paid premiums back! It does cost a little more than a traditional term policy, yet it has the potential to be a forgotten savings account.

Several years ago. I was working with a couple who had a young child and another on the way. They had car payments, a mortgage, daily living costs, and just didn’t think they could handle one more payment. We talked about life insurance, and I was able to show them how inexpensive term insurance would be, and still provide protection if the unthinkable happened.

A few weeks ago, I got a call from the wife telling me their young child is about to enter college, they had paid off their mortgage, and she had beaten breast cancer. She also thanked me for helping them get life insurance when they did, because had she waited until they “had more money,” she wouldn’t have qualified.