Missouri Life Insurance
You don't have Life Insurance!
You’re not alone.
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81% of Americans say they need Life Insurance
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41% own an individually purchased policy
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Sources: Life and Health Insurance Foundation for Education; LIMRA International
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Click here to get a customized life insurance quote.
Life Insurance … Who needs it?
If someone depends on you financially, chances are you need life insurance.
Life insurance provides cash to your family after your death. This cash
(known as the death benefit) replaces your income and can help your family
meet many important financial needs like daily living expenses, mortgage payments
and college savings. What's more, there is no federal income tax on life insurance benefits.
Most Americans need life insurance. To figure out if you need life insurance,
you need to think through the worst-case scenario. If you died tomorrow, how would
your loved ones fare financially?
Would they have the money to pay for your final expenses (e.g., funeral costs,
medical bills, taxes, debts, lawyers fees, etc.)? Would they be able to meet ongoing
living expenses like the rent or mortgage, food, clothing, transportation costs,
healthcare, etc? What about long-range financial goals? Without your contribution
to the household, would your surviving spouse be able to save enough money to put
the kids through college or retire comfortably?
The truth is, it's always a struggle when you lose someone you love. But your
emotional struggles don't need to be compounded by financial difficulties. Life
insurance helps make sure that the people you care about will be provided for
financially, even if you're not there to care for them yourself.
To help you understand how life insurance might apply to your particular situation,
below we've outlined a number of different scenarios below. So whether you're young
or old, married or single, have children or don't, take a moment to consider how life
insurance might fit into your financial plans.
Most families depend on two incomes to make ends meet. If you died suddenly,
could your family maintain their standard of living on your spouse's income alone?
Probably not. Life insurance makes sure that your plans for the future don't die when you do.
As a single parent, you're the caregiver, breadwinner, cook, chauffeur, and so much more.
Yet nearly four in ten single parents have no life insurance whatsoever, and many with
coverage say they need more. With so much responsibility resting on your shoulders,
you need to make doubly sure that you have enough life insurance to safeguard your
children's financial future.
Just because you don't earn a salary doesn't mean you don't make a financial
contribution to your family. Childcare, transportation, cleaning, cooking
and other household activities are all important tasks, the replacement value
of which is often severely underestimated. Some surveys have estimated the value
of these services at over $40,000 per year. Could your spouse afford to pay someone
for these services? With life insurance, your family can afford to make the choice
that best preserves their quality of life.
As the years go by, you may feel your need for life insurance has passed. But just
because the kids are through college and the mortgage is paid off doesn't necessarily
mean that Social Security and your savings will take care of whatever lies ahead.
If you died today, your spouse will still be faced with daily living expenses.
What if your spouse outlives you by 10, or even 30 years, which is certainly
possible today. Would your financial plan, without life insurance, enable your
spouse to maintain the lifestyle you worked so hard to achieve? And would you be
able to pass on something to your children or grandchildren?
Did you know that depending on the size of your estate, your heirs could be hit
with a large estate tax payment after you die (up to 48% of your estate depending
on your state). The proceeds of a life insurance policy are payable immediately,
allowing heirs to take care of estate taxes, funeral costs, and other debts without
having to hastily liquidate other assets, often at a fraction of their true value.
And life insurance proceeds are generally income tax free and can be arranged to
avoid probate. Finally, if your insurance program is properly structured, the proceeds
from your life insurance policy won't add to your estate tax liability.
Besides taking care of your family, life insurance can also protect your business.
What would happen to your business if you, one of your fellow owners, or perhaps
a key employee, died tomorrow? Life insurance can help in a number of ways.
For instance, a life insurance policy can be structured to fund a "buy-sell" agreement.
This would ensure that the remaining business owners have the funds to buy the company
interests of a deceased owner at a previously agreed upon price. That way, the owners
get the business and the family gets the money. To protect a business in case of the
death of a key employee, "key person insurance," payable to the company, provides the
owners with the financial flexibility needed to either hire a replacement or work out
an alternative arrangement.
Most single people don't need life insurance because no one depends on them financially.
But there are exceptions. For instance, some single people provide financial support
for aging parents or siblings. Others may be carrying significant debt that they
wouldn't want to pass on to family members who survive them. If you're in these
types of situations, you should own life insurance because you wouldn't want your
loved ones to be burdened financially in the event of your premature death.
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Term Life Insurance
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Length of Coverage:
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Last for a specified period of time. Typically 10 or 20 years
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Premiums:
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Based on your age and health, but this insurance is generally
less expensive than other types
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Cash Value:
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There is no cash value to term insurance
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Advantages:
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Offers the highest death benefit for the lowest cost
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Types of policies:
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Level terms of 1, 5, 10, 15, 20, 30 and decreasing terms
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Permanent Life Insurance
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Length of Coverage:
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Can last to age 100 or later as long as the premiums are paid
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Premiums:
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Initially higher than term premiums, but often stay level for life
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Cash Value:
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Permanent can build cash values over time and grow on a tax-deferred basis
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Advantages:
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Offers life long protection and tax-deferred savings
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Types of policies:
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Whole Life, Universal, Variable, Interest Sensitive
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Life Insurance Definitions
Term insurance provides protection for a specified period of time; a term of 1, 5,
10 or 20 years or up to age 65 is available. This type of policy only pays a benefit
if you die during the policy term. Term insurance does not build cash value. If you
stop paying your premium, the insurance expires. This insurance generally is less
expensive than other types of life insurance.
Both customary Universal life and Whole life products are types of cash-value life
insurance. However there are many important differences between them. One relates
to product clearness. In Universal life policies, it's simple to look at the
internal operations of this type of policy and to scrutinize the relationships among
various policy elements (premiums, mortality charges, and expenses, cash values,
interest credits,) and how they interrelate with each other. Another difference is
that unlike whole life, a universal life policy returns are freed from fixed-rate,
long-term contracts and replaced with policies whose income were tied to short-term
interest rates and every so often adjusted. After the first payment, universal life
allows you to pay premiums at anytime, in almost any amount, conditional on certain
minimums and maximums. You may also increase or decrease the amount of the death
benefit easier than under a customary whole life policy.
The changes that can be made are a great advantage over both whole also known as
permanent life and term products. Let our professionals help you with all of your
universal life insurance quotes. We are here to explain all of the technical differences
in all types of policies available for your family’s requirements and financial security.
An annuity pays a monthly (or quarterly, semi-annual, or annual) income benefit for the
life of a person or for a specified period of time. The annuitant (insured) can never
outlive the income from the annuity. While the basic purpose of life insurance is to
provide an income for a beneficiary at the death of the insured, the annuity is intended
to provide an income for the life of the annuitant.
There are two basic types of annuities, fixed annuities, which pay a fixed income
backed by fixed dollar investment such as secure bonds and mortgages, and variable
annuities, which vary in payment according to the value of stock and bond investments.
Click here to get a customized life insurance quote.
Copyright © 2008 by The Insurance Resource