Neither of my parents were ever educated on the importance of having a life insurance policy. They both worked loyally for their employers and were in the era when pensions were still a prevalent retirement vehicle, so they never worried. They did okay. Sadly though, they worked really hard to raise and educate four children while sacrificing their own personal desires of travel and leisure. By the time they were both retired and living in the house of their dreams, enjoying a moderate social life, and spending time on the golf course, Dad suffered a stroke and was never the same. Mom cared for him as best she could up until he passed. They had enough money to make it work, but they had to sell their house when it was a buyer’s market, and neither had any long-term care.
Fast forward to 2017. My mother was needing more than we could physically provide. Her mobility was declining rapidly, and she needed a strong support system to see to her needs. She was too far advanced in age to qualify for life insurance, but we were able to secure an excellent annuity that provided long term care so that she would not have to deplete every penny of her pension to live a comfortable life. If we could go back in time, life insurance with a well-designed policy by a professional who knew what he or she was doing, would have saved them a small fortune, and allowed them to keep the house.
I share my story, because I am helping families and businesses everyday protect themselves from the unforeseeable. Planning is everything and provides the security to lessen stress – which is what causes so many illnesses anyway. So, here are the three reasons you need to consider getting a life insurance policy.
First, life insurance is an income replacement tool. What this means is that if you are a single person who has experienced a tragic illness, and you cannot perform two out of six daily living functions, the right policy will provide you with a means of drawing funds out of the death benefit to cover your care needs. This means you will not be subject to “spending down” your assets under government regulations to pay for medical expenses.
Second, if you own a home, this is your mortgage protection if you pass away while leaving a family with a means of providing housing and education for your loved ones to continue living without worries of losing the home and their future opportunities. I have known many people who have had to create a Go-Fund me page just to simply pay the cost of the funeral and burial. The families are left scrambling to figure out how to keep the home and provide for the children. Peace of mind is priceless.
Third, since we don’t really know how long the Social Security benefits will remain intact to assist retirees when they leave work, there are insurance policies that are capable of acting like a Roth IRA (under current IRS tax code – 7702,) that can protect your assets with no loss provisions in the contract while growing via indexes returns and allowing you to take funds out at retirement completely tax free. These policies also offer a long-term care provision, AND the death benefit passes on to the heirs’ tax free.
When working with your professional, ask questions about what policies they are allowed to sell and which policies they recommend. Ask if they use any of their recommended polices for their personal use. If they are not using what they are selling, there is cause for concern. One great resource about how best to utilize the third type of policy is The Power of Zero by David McKnight. When I train new agents, this is required reading. You can also visit us at www.mvplwrc.com to schedule an on-demand tutorial about the various resources that are available. Learning about life insurance can remove unnecessary burdens and provide an invaluable security in your life.
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