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Life insurance is integral to effective planning.

A life insurance policy is a legal contract between you and the life insurance company.

Life Insurance

In simple terms, life insurance is where you agree to pay money in regular installments (the "premium") and the insurance company (subject to the terms, conditions, limitations and exclusions of the contract) agrees to pay a sum or sums of money if you die and/or if certain other event(s) or actions or situations occur while the policy is in force as set out and defined in the contract. Just like any other contract, life insurance contracts have terms, conditions, limitations and exclusions. Some life insurance contracts are relatively 'simple' whereas others are highly complex legal-financial documents.

Life insurance can be used:

  • as income protection to cover living and/or childcare expenses in case the breadwinner in a family dies.
  • as a type of security for paying final expenses and bills for older adults
  • to assure future education expenses can may be met.
  • to leave an inheritance for loved ones or favorite institution.

There are three types of life insurance:

  • Straight/Ordinary/Whole Life: All describe a life insurance plan that includes a death benefit, cash value and a fixed premium.
  • Universal Life: Life insurance death benefits with cash value based on variable interest rates and premiums that can be flexible.
  • Term Life: Life insurance for a specified time (usually one year) with a death benefit, no cash value and premiums that increase upon renewal.

Do You Need It?

Think of insurance as income protection. If the insured passes away, the beneficiary receives the proceeds to offset the lost income. If you are married and your spouse is not working, you probably need insurance. The primary purpose of life insurance is to replace the insured person's lost income in case of death.

If you are independently wealthy, you may think that you don't need life insurance because you already have all of the money that you need. That may be true for some but estate and tax settlement considerations could disturb any bequests and/or obligations to your surviving family.


Purchasing a plan 1-2-3

  1. Determine the type of policy and the benefits that would meet your needs.
  2. Shop around by comparing premiums, and costs of insurance of several policies from several companies.
  3. Calculate that the premiums paid do not exceed the death benefit within the first ten years of the policy.

A premium is the payment you make on the life insurance policy payable monthly, quarterly, semi-annually or annually. Premiums are calculated based on the age, sex and health of the person who is insured by the policy. The younger you are, the lower the premium. With Straight Life Insurance your premiums usually remain the same from year to year. With Universal Life Insurance, you can raise or lower your premiums. Term insurance policy premiums increase upon renewal.


Buying Life Insurance

  • Know what you need: The best reason for an individual to buy life insurance is for protection against dying too soon. The person buying life insurance should be primarily concerned with seeing that his or her survivors do not face a financial handicap. There may be other reasons that apply: Life insurance is also purchased to pay estate taxes. Business relationships often require life insurance or can benefit from it. Annuities offer a secure way for consumers to make sure they don't outlive their money. Beware of anyone who tries to sell you life insurance as an "investment." Life insurance should be purchased for the protection it will give you.
  • Know the company you are buying from: You can check the financial stability of any life insurance company through several reputable national rating companies. Some ratings are available at public libraries.
  • Never buy a policy you don't understand. If you are given illustrations or booklets, save that material with your policy. If your agent or company cannot explain the policy terms to your satisfaction, shop elsewhere. Make sure you understand the guarantees in your policy (not just the agent's promises of returns) and the surrender penalties if you choose to drop the policy at any time. These costs are often hidden in a life insurance or annuity policy.
  • As your personal situations change (i.e., marriage, birth of a child or job promotion), so will your life insurance needs. Care should be taken to ensure this product is suitable for your long-term life insurance needs. You should weigh any associated costs before making a purchase. Life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, and has additional charges for riders that customize a policy to fit your individual needs.

Securities offered through Nationwide Securities, LLC., member FINRA, SIPC. DBA Nationwide Advisory Services, LLC. in AR, CA, FL, IL, NY, TX, and WY. Representative of Nationwide Life Insurance Company, affiliated companies and other companies.

 

Contact Us

Rolland & Associates
Bob Rolland
50 S. Liberty St.
Suite 162
Powell, OH 43065
(614) 789-1891


To learn more about insurance, talk to a Rolland Insurance Agent today by calling 614-789-1891.

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