Skip to main content

Sound Advice: June 28 2023

Life Insurance

Choosing the right life insurance policy is an important decision that can provide financial security for your loved ones in the event of your untimely death. There are various types of life insurance policies available, each with its own features and benefits. To help you make an informed choice, it's essential to consider your financial goals, family's needs, and budget. Here are some of the best choices in life insurance:

1.     Term Life Insurance: Term life insurance is a popular and straightforward option. It provides coverage for a specified term, typically ranging from 10 to 30 years. Term policies offer a death benefit to the beneficiaries if the insured passes away during the policy term. This type of insurance is often affordable and suitable for individuals seeking temporary coverage, such as paying off a mortgage, covering education expenses, or replacing income during working years.

2.     Whole Life Insurance: Whole life insurance is a permanent policy that provides coverage for the entire lifetime of the insured, as long as premiums are paid. It offers a death benefit and accumulates a cash value component over time. The cash value grows on a tax-deferred basis and can be accessed during the policyholder's lifetime through withdrawals or loans. Whole life insurance is more expensive than term insurance but can serve as a long-term financial planning tool, offering both protection and savings.

3.     Universal Life Insurance: Universal life insurance is another form of permanent coverage that combines a death benefit with a cash value component. It provides flexibility in premium payments and death benefit amounts, allowing policyholders to adjust their coverage as their needs change. Universal life insurance offers potential investment growth on the cash value component, which can be used to supplement retirement income or meet other financial goals. Keep in mind that it also carries the risk of inadequate returns if the underlying investments perform poorly.

4.     Variable Life Insurance: Variable life insurance allows policyholders to invest the cash value component in various investment options, such as stocks, bonds or mutual funds. The returns on these investments are not guaranteed and can fluctuate based on market performance. Variable life insurance offers the potential for higher returns but also involves greater risk compared to other types of life insurance. It is suitable for individuals comfortable with investment decisions and seeking potential long-term growth.

When selecting a life insurance policy, consider factors such as your age, health, income, financial obligations, and long-term goals. It's advisable to evaluate multiple quotes from reputable insurance providers, review policy terms and conditions, and seek guidance from a licensed insurance professional, if needed. This can help ensure that you choose a life insurance policy that aligns with your specific needs, offers adequate coverage, and fits within your budget. Regularly reviewing your policy and updating it as circumstances change is also important to ensure that your coverage remains relevant and effective over time.

N. Russell Wayne, CFPÒ

Any questions?  Please contact me at nrwayne@soundasset.com 

Comments

Post a Comment

Popular posts from this blog

Sound Advice: February 21, 2024

800-000-0000 That’s 800-000-0000 Again, 800-000-0000 That’s the typical closing for the hard sell commercials that are increasingly polluting media airwaves.   These are the commercials for products or services you rarely need or most definitely should avoid. A substantial number are on behalf of groups of attorneys who would have you believe that you and many others may be entitled to cash compensation for having used or being exposed to some evil item or substance some time in the last few decades.   The pitch always includes a comment that there’s no cost to you unless there is a settlement in your favor. Much of this is rubbish, but when the appeal suggests that there’s nothing to lose, why not take a shot.   And, as you would expect, “advisors” are standing by 24/7 to take your call and help get the process in motion.   What kind of advisor would be available at 3 a.m.? One version of this approach pops up every year between October 15 th and Decemb...
Post a Comment
Read more

Sound Advice: September 21, 2022

The Professional Approach To Stock Selection There are various approaches to stock selection, but the two that predominate are fundamental analysis and technical analysis.  Fundamental analysis is a numbers-based method that evaluates key factors such as income and financial health, including the past, present, and future.  Technical analysis emphasizes movements and formations of stock prices. Fundamental analysis is based on factors that over time have proved to have a meaningful impact on stock price movements.  The optimal picture of corporate profitability is steady growth, both in the past and, prospectively, in the coming years.  Steady growth is rewarded by higher valuations of underlying earning power than those accorded companies with erratic progress. When professionals screen (filter) the data of the broad universe of stocks, they look for companies that move ahead every year, regardless of the prevailing economic conditions.  Although high pas...
Post a Comment
Read more

Sound Advice: July 26, 2023

Is Day Trading a Good Idea? Day trading can be both exciting and potentially profitable, but it also comes with significant risks and challenges. Whether it's a good idea depends on several factors, including your financial situation, risk tolerance, time commitment, and knowledge of the markets. Here are some considerations to keep in mind: Risk and volatility: Day trading involves buying and selling securities within a short time frame, often within the same day. This exposes you to the inherent volatility and risks of the market. Prices can fluctuate rapidly, and unexpected events can have a significant impact on stock prices, making it challenging to consistently make profits. Time commitment: Day trading requires a substantial time commitment. It involves closely monitoring market movements, conducting research, and executing trades. It can be stressful and demanding, as you need to be actively engaged in the market during t...
Post a Comment
Read more