Life Insurance | Raborn Insurance Associates

Hate to pay insurance premiums and never use the coverage? I hear it all the time, I pay these high health insurance premiums and never go to the doctor. Well, Life coverage is the one type of insurance we all know for a fact will eventually have a claim filed for benefits! Final expenses and estate planning may be two of the more common reasons for investing in a policy. However, there is so much more to today’s life policies, return of premium option before a claim is filed, cash value builds up for retirement. Since premiums are based on a number of factors, we license with many carriers in an effort to find the right product for your need.

Types of Life Coverage/Policies

Temporary Life Protection: Term Insurance

There is no charge to discuss your specific situation, our agency is paid a commission if you decide to enroll through us. However, we do not pressure. We are independent agents representing many carriers in Georgia and South Carolina, your needs determine the plan/carrier.

Term insurance provides coverage for a specific length of time: 10, 20, 30 years. Typically, does NOT build cash value and if you do not make payments or reach the end of the policy term coverage ends. Definitely the cheapest form of insurance when younger.

Term with a return of premium rider. Higher premiums but the carrier will return all paid premiums at the end of the term if no claim is paid. It will begin to build some cash during the policy years. Some carriers give you an additional option- instead of the cash, they will issue a paid up life policy. This can be a great option depending on age, the paid up coverage may be up to 2-3 times the cash.

General comments:

In many situations, coverage on the job is term. It may increase in premium each year, or any number of years: 3,5,10. The premium may seem very reasonable because it is group coverage or in some cases employer paid. I want to provide a “soft warning”. Coverage controlled by the employer could result in loss or changes:

a. companies are sold
b. benefits change with a new carrier
c. you may be temporarily laid off or terminated, become disability, or quit and go to a new job which may not offer life coverage
d. if you retire with the company and get to carry your benefit, often the face value decreases when you reach 70 years of age, so when you near the age of need you lose benefits

Permanent Insurance

Whole Life

Whole Life- most expensive but has a guaranteed policy value, level premiums, and it builds a cash value. Cash growth can have guaranteed and non- guaranteed values. Some carriers (mutual companies) offer growth through non-guaranteed dividends paid by the carrier.

Universal Life

Universal Life (UL)- with this type policy the cost of the life coverage increases as you age. Thus, typically you pay more than your initial cost of coverage so the policy can build a cash reserve to pay future premiums. This policy has guaranteed and non-guaranteed growth values. This means if the cash build up does NOT perform well your policy could lapse in the future or you would be required to pay increased premiums. Certain UL policies specify how your cash is invested: Variable (I do not sell) involves cash growth through market investing. Indexed (I do sell) gives you an option to grow your cash by how well certain stocks grow, such as the S&P 500. Your money is not actually invested into the stocks but your cash grows by how well they perform. Note the carrier will announce a “cap” of how much of the growth you receive during the upcoming year. Guaranteed UL is not designed to grow a cash value but will guarantee the policy value and level premiums as long as premiums are paid on time.

Why have life insurance

UNDERSTANDING WHAT IS RIGHT FOR YOU WILL ONLY BE CLEAR IF YOU KNOW THE PURPOSE OR NEED FOR THE PROTECTION. Three words: Peace of mind. Consider these examples as I start from simple to more thought provoking.

Mortgage payment is not sustainable if either spouse dies. You do not want the family lose the house to non-payment be forced to sell resulting in drastic changes needed even as they grieve- buy a smaller home, change school districts and no longer live close to friends/family. If offered a life policy by the mortgage company compare rates on 15, 30 year term coverage, depending on your age and health you may get a much better premium.
If all your life coverage is through your employer, you may be vulnerable. You need to know if you can keep the policy if/when you leave the company, if premiums increase as you age, and/or does coverage reduce at a specific age.
Single parent and you plan on a family member or friend to care for your children in the event of your death. Their resources and health changes thus you need to ensure there is funding available to assist them with your child(ren).
Blended family and though you have a will, you want to ensure your children receive an inheritance when you die. Example: the house has been in the man’s family, he dies, the step mom gets the home in the will. Her children expect to receive the house at her death. They sell the home and his kids receive nothing.
There are several children who will share the life insurance and divide assets in the estate. The home left the children is in disrepair thus has not sold- so taxes, up keep, and utility bills though minimal continue. This drains any assets and will cause money to be used to update the house or sell well below market value.
Never had a retirement plan or it performed poorly. You know once one of you die the income is reduced to only one. Most of us live on what we make. Provide life protection equal to replacing at least a minimum number of years of your salary or Social Security.
Long term care insurance premiums have sky rocketed. You need long term care help (home care, assisted living, nursing home). You can only qualify for Medicaid after you spend down your own money. What about your spouse, or how do you feel all your hard work does not get passed on to your children? Life coverage can replace all you had to spend for care.
You have a business and worry about what happens if you become disabled or die and no other family members understand the business or there’s not enough assets to pay off the debt. Your death can cause a loss of income, debt can cause a loss of the business and the future source of income.
You retire and must decide- do I take 50% of my retirement money so they will continue to provide benefits to my spouse when I die? If healthy get quotes on how much life insurance you can get with 40-45% of the retirement and increase your spendable income.

Tell me your reason!