Six Things You Need To Know About Life Insurance

Bob Ley photo January 2016(Note:  the following is an article written by speaker, author and wealth advisor
Tim Maurer which appeared in a recent blog posted by the American Fraternal
Alliance. The article has been edited by Western Catholic Union’s National Sales
Director, Bob Ley.)
Life Insurance is one of the pillars of personal finance, deserving of consideration by every household. I’d even go so far as to say it’s vital for most. Yet, despite its nearly universal applicability, there remains a great deal of confusion, and even skepticism, regarding life insurance. To help, here are 6 things you absolutely need to know about life insurance:
1.  If anyone relies on you financially, you need life insurance. It’s virtually obligatory if you are a spouse or the parent of dependent children. But you may also require life insurance if you are someone’s ex-spouse, life partner, a child of dependent parents, the sibling of a dependent adult, an employee, an employer or a business partner.
2.  Life Insurance does not simply apply a monetary value to someone’s life. Instead, it helps compensate for the inevitable financial consequences that accompany the loss of life. Strategically, it helps those left behind cover the costs of final expenses, outstanding debts and mortgages, planned educational expense and lost income. But most importantly, life insurance can lessen financial burdens at a time when surviving family members are dealing with the loss of a loved one.
3.  Life Insurance is a contract (called a certificate, in the case of WCU). A Certificate is a legal contract between a life insurance company (WCU) and someone (or occasionally something like a trust) who has financial interest in the life and livelihood of someone else. There are four (4) primary roles in a life insurance certificate. The INSURER is the insurance company (WCU) responsible for paying claims in the case of a death. The OWNER is responsible for premium payments to the insurance company. The INSURED is the person upon whose life the certificate is based….in most cases, the owner and the insured are one and the same. The BENEFICIARY is the person or other entity due to receive the life insurance death claim, in the event of the insured’s passing.
4.  Life Insurance is a risk management tool, NOT an investment. While some life insurance certificates have an investment feature that can offer a degree of tax favorability (the cash value accumulation), insurance is rarely, if ever, an optimal investment and should not be considered as an investment tool.
5.  Determining the optimal life insurance certificate for you does not have to be complicated. While we could perform a detailed life insurance needs analysis, it is more important to get set-up with something you can comprehend and afford, than it is to push off an important decision due to life insurance’s intimidating complexity. In the vast majority of situations, a household would be well cared for simply by buying enough life insurance to replicate all or most of the insured’s income for a term as long as the household expects to need that income.
6.  Consider using a live person to help in your planning. There are many online tools that can help give you an idea of how much money you should pay for the certificate you need. (One we recommend is the needs calculator offered by www.lifehappens.com) But, once you get to that point, I would recommend contacting a real, live insurance agent who can walk you through the selection and application process.
I suspect that we don’t like talking about life insurance because we don’t like talking about death. But, open and honest discussions about planning for an unexpected death can be surprisingly life-giving. And, the chances are good that purchasing life insurance is still an important part of your long-term and comprehensive financial plan.
If you have any questions, please contact the Sales Team at Western Catholic Union:  877-928-1877 or sales@wculife.org.