Why don’t people buy the life insurance they need?
- Purchasing life insurance forces you to admit you are not going to live here on earth forever. (optimistic joke, so far so good)
- Buying life insurance is something you do for others. When you die, you will not be around to see what happens to your loved ones.
- It’s not easy to get good advice on life insurance. Rules of thumb and emotions are used to drive a sale instead of performing a logical analysis which looks out for the clients best-interest.
- Life insurance salesman are notoriously persistent, in your face and you can’t get them to leave your house. Who wants to deal with that?
- Underwriting is usually required. Our body may not be the “temple of Adonis” it once was. People say “once I lose that extra 15 pounds, I’ll get the insurance” and put it off.
How does Bucholtz Consulting make the life insurance process easier for our clients? We begin by asking questions to make certain our clients stay in control of the life insurance process and know they are making the right decisions. Life insurance is a component of the financial planning process. We are not bound to any particular life insurance company. Finding the right policy at the best rate based on your needs to protect your family is what we are about.
Do you need life insurance?
If you can answer no to all of the following four questions, you most likely do not need life insurance:
- Is anyone, other than you, dependent on your income?
- Does anyone count on you for the support you provide?
- Do you have financial goals you want to accomplish even if you die?
- Would your death create a hardship for people you care about?
- Are you concerned about the amount of tax you may pay at your death?
How much life insurance do I need?
Bucholtz Consulting developed the following formula to help clients determine how much the right amount is for them:
+ Financial Responsibility
+ Financial Goals
– Current Wealth
= Life Insurance Need
By breaking down life insurance need into four factors (Obligations, Responsibility, Goals, Current Wealth) we can work through the numbers with our clients so they understand how much life insurance is needed and feel confident they have the right amount of coverage.
Please see the “Life Insurance Life Cycle® “ visual for more information on this process.
What kind of life insurance is “best”?
There are two main types of life insurance: term insurance and permanent insurance.
Term life insurance provides protection for a specific period of time*, usually 30 years or less. Examples: 20-year term or 10-year term. The cost of the policy will generally stay level for the length of the term. Many policies will offer a “conversion option” which allows the insured to purchase a permanent policy with the rates based on their current age and the underwriting class they qualified for when the term policy was issued. This conversion option must be exercised within a certain time period or it will expire. Most times, term policies have no cash value, only the death benefit.
Permanent life insurance includes whole-life policies, universal life policies, fixed life policies and variable universal life policies. Generally, a portion of the premium goes to pay for death benefit protection and the remaining amount is put into a “savings account” in the life policy and provides a cash value.
When deciding which type to use, we will discuss the following:
- How long will I have this insurance need?
- Can I afford the premiums of permanent insurance if I need it more than 30 years?
- Does it make financial sense to buy permanent or should I “buy term and invest the difference”?
Where should I buy my life insurance?
It is important to purchase insurance from someone who has access to many different insurance companies so that they can seek out the most competitive policy for you from a variety of insurance companies.
Bucholtz Consulting has access to over 50+ top-rated insurance policies so we can find the right policy for our clients at a good value. This provides flexibility for accessing good rates for various health conditions and makes certain we receive good value for clients’ insurance dollars.
How can I make sure my current policy is the right policy for me?
Evaluating a current policy can be confusing. We make it simple. If you have a permanent police (whole life, universal life) we complete a request to receive detailed information on your current policy. We then perform a financial analysis to determine how your policy is performing. We then compare your current policy with other alternatives.
*subject to the claims-paying ability of the insurer