Life insurance: something many people don’t care to discuss, let alone truly understand. It’s a boring topic that people tend to brush off, and most resort to letting their employer’s handle it. It’s easier, fast and simple… and you don’t even need to think about it!
According to the Money Coach Blog, the purpose of any insurance “is to cover the costs of risks that we are either not willing or don’t have the resources to cover ourselves,” whether it’s for a car, your life, your home, or any other asset.
In regards to life insurance, it’s always recommended to calculate the cost of your family’s current standard of living if you/your income are no longer accessible. From there, it’s recommended to add in any large expenses that may need coverage, which could include money owed for mortgages and loans, college funding, or other financial obligations. After netting out other insurance and investments available, you will get a realistic idea of the amount of coverage you need.
Now this may soun like a headache, but it’s perhaps one of the most important assets you’ll plan for your future.
Ever thought about insurance as an asset class? Well, Money Coach Blog points out that when you invest, you’re likely storing money into different types of asset classes: “Stocks and bonds of large, small, US and foreign companies.” It’s important to not store all your eggs in one basket to reduce risk.
So then, what’s the point we’re trying to make?
Well… many people don’t know this, but you can think outside the box when it comes to investing in life insurance. It’s not one way or another, and bcause of that… opportunities are endless.
Insurance is a risk tool meant to replace things that you perhaps don’t have access to. Many people have the employer-sponsored group plan, in addition to something paid for outside of your employer. Diversifying your coverage can create some term and permanent insurance.
There are two different types of insurance: term and permanent. Term insurance is for a fixed period and premium, covering more specific risks for a specific period of time. Permanent life insurance on the other hand, is more long-term where your premium that you pay is used to build cash value. Money Coach Blog points out the three great benefits to permanent life insurance, which are: guaranteed value, tax-free dividends, and access to cash value at any given time.
Interested in learning more as to how you can strategically divide your assets and have permanent life insurance? We can help! https://upplanningedge.com/
Source: https://moneylinkpro.wordpress.com/2011/01/07/life-insurance-a-misunderstood-asset-class/
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]