Viking Magazine - April 2012 - 43

30 percent of
U.S. households
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whole life insurance policies are
locked in and continue until the
person dies, while universial life
policies allow for more premium
flexibility. Someone who buys
this type of policy may want to
leave an inheritance to a spouse
and children, or protect an estate
or family business. After the cash
value builds up, the policyholders
can borrow against the policy.
It is more expensive because the
term of coverage is indefinite.
Types of permanent policies
include whole, universal and variable.
Depending on the product,
premiums can be paid annually,
either fixed or flexible or a single
premium. " They all provide
different degrees of control over
how cash value is invested in
exchange for more flexibility and
fewer guarantees, " says Michael
Kitces, director of research for the
Pinnacle Advisory Group in Columbia,
Md. Some people opt for
a blend of term and permanent
policies for more coverage during
their working years and less once
they retire.
To determine the amount that's
right for you, consider free online
calculators, suggests Amy Danise,
spokesperson for Insure.com, a
consumer insurance education
website. " Use a few to see if you
are getting the same answer, " she
says. " Good ones ask specific
questions about income replacement,
final expenses and college
costs. " In addition to adding up
your debt, be sure to subtract
your assets to arrive at the right
amount of coverage, she adds.
While your first choice should
be individual life policies, Danise
suggests supplementing with
a group policy through your
employer. It may be minimal but
premiums are very inexpensive so
it can be another way to get additional
coverage for your family.
For the best value, experts advise
buying when you are young.
" The sooner you can lock in, the
better, " says Danise. " In your
thirties is a great time to buy,
especially if you are healthy. "
Premiums will go up with every
passing birthday and there is an
increasing chance of developing
a health condition that could
raise your rates. Even if you can't
afford a large policy, it's smart to
buy one when you are young and
then add more coverage as your
budget allows, says Danise.
Kitces adds that while the
process of buying insurance
can be daunting, it's one of
those critical pieces of a sound
financial plan. " We don't want
to think about our own mortality, "
he says. " But it's important,
necessary stuff. "
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ask an expert
http://www.Insure.com
Viking Magazine - April 2012

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