Life Insurance is the most important policy I sell and comes with several options.
It is the most important policy because if a provider passes away prematurely, I do not want to tell the significant other that there is no life insurance for them and their children. There are several reasons to have a life insurance policy. The number one reason is so that your loved ones continue the lifestyle you present for them and if they have to adjust to the decreased income it can be gradual and not immediately. You don’t have to have children either. If you are in a business relationship and the company would suffer because one of you die, or an employee you would have a hard time replacing. If you own a home together, but unable to make the payments without the other. Juvenile Life Insurance is an excellent thing to start as well. You can start a $50k Index Life Policy, pay $25/month and by the time they are in their 50s could have a substantial retirement account.
Term insurance is the most common Life insurance policy, but the dirty little secret is that 5-7% never pays out.
Many companies provide term insurance for their employees, but the employees have no control over what they can do with it. If you get fired or quit, the policy terminates. I say have their policy, but have something you can control as well. Start with a term if you are unable to afford Index or Variable Life insurance because Farmers Term Insurance has a nice little twist. If you start in Term, which comes in 10, 20, and 30-year options, you can convert your policy into an Index or Variable Life policy. The sooner, the better! Converting your policy means you will pay more annually or monthly, but now you have a permanent life insurance policy AND a retirement account. The minimum Term life policy I urge is $150,000 because to have a permanent policy that is the bottom threshold where it must begin.
The Index Life Policy is new and exciting. In a time where the market is volatile, Farmers has created a product that will never lose the principal, but will never earn more than 12%. Your money mirrors the S&P 500. If the market goes to up 5%, you get 5%. If the market goes up 20%, you get 12%. On the flip side if the market goes down 2%. You lose zero. If the market goes down 40%? You still lose zero. This policy is preferable for the conservative investor who doesn’t want to watch their money fluctuate drastically.
The Variable Life Policy is the aggressive, betting person’s type of policy. This is for the younger group ages 18-35. Mostly because over the long haul, the market averages about 9.9% growth. The Policy allows the investor to choose from Farmers pre-selected mutual funds to grow their accounts. The investor can change the mutual funds anytime, but must understand the volatility of the market, and that long-term investment is the priority.
It is important to contact a life insurance agent at a trusted agency to help you plan the right policy for you and your family. If you have any questions, we are here to help!