Tim Wilhoit agency owner of Your Friend 4 Life in Nashville, TN answers a few common questions about life insurance that consumers and agents frequently ask. Hopefully, one of these questions can help you as well.
Why Is It A Good Idea To Get More Life Insurance After Getting A New Mortgage?
The need for life insurance for most people increases with debt. The fact that your question states that you have a new mortgage suggests you now have a new debt. If you or your spouse or partner were to die and that income is lost, would it be a burden to the other loved one to cover this new debt? If the answer is yes, you need additional life insurance. If you just closed on the new house you will soon receive or be bombarded is probably a better way to describe it, with letters about mortgage life insurance. These letters will look as if they are being sent by your mortgage company, but chances are they are not. Life insurance companies pay mortgage lenders for their lists and their logos to create leads to sell decreasing mortgage insurance. As you pay off your mortgage through the years, the face amount or benefit to your loved ones decreases, because you owe less to the bank. If you purchase a guaranteed level term life insurance policy, then your loved ones get the difference not the insurance company. If you have a 30 year mortgage for $200,000, purchase a $200,000 30 year level term policy to cover that debt for your loved ones. When you pay off the mortgage drop the insurance coverage. Never leave a loved one holding excess debt when you die.
What Is The College Major To Study In Order To Be An Insurance Agent?
There are a few universities that offer bachelor degrees in risk management and insurance. Or certainly a business degree in marketing. Education is a wonderful experience that no one can ever take away from you. However, there are many successful insurance agents without degrees who found great mentors in our industry. One thing to consider is unless you have a full scholarship or deep pockets to pay for this degree, measure the cost versus use in our industry. I believe you will find a hard time justifying the high cost of college versus the reward of a degree in an industry that does not require a degree to be hired or become successful. Just my two cents worth.
How Much Life Insurance Should A Startup Business Founder Have?
If you are starting a business you will either need buy/sell life insurance for a partnership or key man life insurance for sole proprietor. Start-ups can be tricky. You must calculate the capital infusion and sales if any. You may need a third party audit to place a value on your business. Once you have that number, that should be near your face amount or in partnerships valued equally divided by the percentage of ownership. You may want to save money and start off with a 10 year term and repurchase in a couple of years once annual sales are established. Good luck and congratulations!
Does It Make Sense To Buy Whole Life Insurance?
Buying whole life insurance can make sense for a lot of different reasons. If you need a death benefit to leave to loved ones that lasts your “whole life” certainly this product can accomplish that goal. Whole life is the Swiss Army knife of life insurance plans. The cash value can be used for anything from critical illness money to children college funds to retirement funds. I recommend sitting down with an experienced independent life insurance broker who can help you decide if whole life, universal life or term life will best accomplish your goals within your budget.
Is Disability Insurance The Same As Long Term Care Insurance?
No these are two totally separate types of insurance plans used to cover totally different needs. Disability insurance can be either long term or short term. Long term disability is used to replace your income for the rest of your working life. It usually has a bit longer elimination period 90-180-360 days before benefits begin to pay. The benefits can pay as long as age 67 when social security benefits start. A short term disability insurance plan pays benefits sooner within days, but only lasts a few months or up to a couple of years. Both disability insurance plans are insuring most people’s most valuable asset, their ability to earn a living. Disability insurance should be purchased when a person starts working for a living. Long term care insurance is meant to cover a person that can no longer care for themselves. The person needs home health care, assisted living or a nursing home. Usually the time to purchase a long term care policy is when a person gets older, typically in their 50s or 60s, but some wait until their 70s. It really depends more upon their health and lifestyle. Just don’t wait until you have been diagnosed with an affliction, then is too late.
Please be sure and read all of the blogs in the series life insurance FAQs from April 2014 to find your question or contact Tim Wilhoit at Your Friend 4 Life.
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Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger, author and team leader with over 28 years of experience in sales and marketing in the insurance and beverage industries.