Last Updated: 4/27/2018
Life insurance is a tool that provides an immediate financial benefit to anyone who would suffer from a financial hardship due to you passing away. This would include your family, loved ones, business partners, or in some cases even your employer.
Life insurance has traditionally been purchased to help protect the insured’s family, but it can be used for a variety of other reasons as well. Some common, less-known reasons for purchasing life insurance include mitigating your business risk by securing an SBA loan, or protecting your company from the loss of a key business partner.
Common reasons for setting up life insurance coverage include:
- Providing income replacement to your family members who rely on you for financial support
- Leaving money behind to keep your business afloat
- Collateral for a business loan or mortgage
- Providing your loved ones with instant funds in order to pay off estate taxes
At Term Life Advice, our agents specialize in finding our clients affordable life insurance coverage that caters to THEIR exact needs.
Quick Article Guide:
1. How We Can Help You Find the Best Life Insurance Coverage Available
2. Family Protection: Leaving Money Behind for Your Loved Ones
3. Selecting the Best Life Insurance Policy for Family Protection
4. Business Protection: Making Sure Your Business Stays in Business When You’re Gone
5. We’ll Shop the Market to Save You Money and Time
Every life insurance company has its own pricing, underwriting guidelines (how they evaluate mortality risk), and their own unique insurance products. Without having access to each company’s guidelines, it is nearly impossible for the average consumer to know which company would offer them the perfect policy at the most affordable price.
At Term Life Advice, we work with over 60 top-rated life insurance companies to make sure we always match our clients with the best life insurance options available.
With a few questions about your health and coverage needs, one of our licensed agents can shop the market to find the best policy available, and the lowest price. We only work with financially solid “A” rated companies, and our shopping service is free. Life insurance is heavily regulated, which means it’s illegal to mark up the cost of a policy, so why not take advantage of one of our professional’s knowledge and experience?
Almost all life insurance companies offer standard 10, 20, and 30 year term life insurance policies, but don’t limit yourself there – some companies also provide a variety of age-based life insurance options. Did you know you can actually lock-in guaranteed rates for your life insurance until age 90, 95, 100, 105, 110, or even 121?! Regardless of your need for life insurance, Term Life Advice will help you find your best solution at the most competitive rates.
Depending on your specific needs, the professionals at Term Life Advice can help you secure term life insurance, whole life insurance, guaranteed issue or guaranteed acceptance life insurance, and guaranteed universal life insurance.
Many of my clients purchase life insurance simply to have the peace of mind that they’re loved ones will be financially taken care of after they pass away. Below are some examples and explanations of why people purchase life insurance to protect their families.
Providing Income Replacement
The most common reason people purchase life insurance is to provide a source of replacement income to their family. If you were to pass away, your employer would stop paying you, and your family would not have the money they need to pay the bills. Purchasing life insurance for income replacement provides a tax-free income to your family, allowing them to financially continue their same lifestyle despite you being gone.
Providing Mortgage Protection
Life insurance is commonly purchased to protect a mortgage. If you pass away, your spouse will be able to access a large amount of money, tax-free, which could be used to pay off the balance of your family home. They could also use this money to make future mortgage payments, which would prevent them from losing their home in the case that you are no longer around.
Leaving an Inheritance Behind
If you have children or loved ones that you would like to leave an inheritance to, life insurance can provide a tax-free lump sum at the time of your passing. This money can be used for a variety of purposes such as: evening out an inheritance between siblings, providing your children the ability to purchase a home, or money for college.
Avoiding Estate Taxes
If your estate is valued at $11.2 million or more (as of 2018), you may want to consider purchasing life insurance to keep your estate and legacy “whole” for future generations. If your estate is currently valued above $11.2 million and you died tomorrow, your beneficiary could be responsible for paying federal estate tax of 40% of the value that exceeds the tax-free exclusion. Your tax obligation can be paid by a life insurance policy, ensuring your family is able to keep ALL of what you have worked so hard to achieve.
Who will pay for your final expenses and burial costs when you die? Losing a loved one is difficult enough, I’m sure that your family members will be grateful if you planned these things out ahead of time. Term Life Advice works with top-rated companies that offer final expense insurance to anyone between ages 50-85, regardless of their health. We also offer whole life insurance options with or without a medical exam for applicants who are in excellent to poor health.
Most whole life policies range from $10,000 to $50,000 death benefits, but if you’re in above average health, you may qualify for $100,000 or more of coverage. We also offered coverage with rates that are guaranteed to the age of 90, 95, 100, 105, 110, or 121.
If your main goal for purchasing life insurance is to protect your family, there are a few questions to ask yourself:
1. How many years of your lost future income would you want to leave behind?
Most of our clients with children want to make sure that their kids can be taken care of until they become “self-sufficient.” To accomplish this, our clients typically purchase a policy that will extend their coverage to the age they expect their children to graduate high school or college.
2. Aside from your mortgage, to you have any other outstanding debts?
Most clients usually just want to purchase enough coverage to pay off their mortgages, but if you’re the “breadwinner” it’s important to also consider other outstanding debts (car loans & credit cards) as well as burial expenses.
3. Is your intent to leave an inheritance and/or preserve your estate from taxes?
As of 2018, those who inherit estates worth more than $11.2 million will be subject to a 40% estate tax by the IRS. Some states also implement an inheritance tax that can be as high as 20%. If you fall into this category, we recommend purchasing a life insurance policy in order to provide your family the liquid cash that they will need to pay off these expenses. Many clients use this tool to estimate the amount of coverage they need to preserve their wealth for future generations.
In addition to proving financial protection to your family, life insurance is also commonly purchased to establish or protect a business from an unforeseen loss. Below we’ve listed some of the benefits that life insurance can provide for your business.
Buy/Sell Agreements for Businesses
Have you ever wondered what would happen to your business partners, business, or family if you or one of your partners were to suddenly die? Buy/sell agreements are commonly purchased by small businesses for this reason.
Buy/sell agreements are funded with life insurance, and each owner of the business needs to be insured. If one of the owners of the business was to pass away, the death benefit from the life insurance policy is paid to their surviving spouse, effectively buying out their share of the business.
These agreements are set up to prevent a business from being forced to liquidate assets or drain reserves to buy out the deceased owner’s share of the business from their family. Buy/sell agreements also keep your spouse and your partners’ spouses separated from the business.
With a buy/sell agreement, the business typically pays for the cost of each owner’s coverage making the business the owner and the payer of the policy, and each owner’s spouse or surviving family members are listed as beneficiary.
SBA Loans for Small Businesses
If you’re starting a business, most banks will require you to purchase a life insurance policy to collateralize your small business loan. If you were to pass away prior to your SBA (Small Business Administration) loan being fully repaid, the death benefit from your life insurance policy will be used to settle your debt with the lender. This provides the lender with peace of mind, and prevents your family or your business from being responsible for any debts you may leave behind.
Term Life Advice’s agents are experts at finding quick and easy insurance solutions so you can continue to focus on building your business. If you’re in a time crunch, we also offer life insurance policies that can be approved in as little as 24 hours. Once your policy is approved, we’ll help coordinate a “collateral assignment” with your insurance company and your lender. As the balance of your loan decreases, a collateral assignment will insure that your lender is paid exactly what they are owed, and the remaining balance of your life insurance policy will be paid out to your family
Key Person Insurance
If one of your business’s key executives were to pass away, how would your business cope? Key person life insurance is commonly purchased by businesses to provide a monetary influx in the event of an executive passing away. Most importantly, the life insurance companies do not place restrictions on how this money can be used by your business.
The death benefit from a key person life insurance policy is commonly used by the business to locate, train, and hire a new executive. In addition, the proceeds from the insurance policy can also help replace any profits that may have diminished as a result of the transition and the loss. However, as aforementioned, this money can be used however your business sees fit. Key person life insurance policies are owned and paid for by the business, reducing the company’s taxable income.
At Term Life Advice, our agents work with over 60 top-rated life insurance companies in order to save you time and money. After a brief pre-qualification phone interview, we’ll provide you with accurate rates from the best life insurance companies available.
If you decide to move forward, we’ll help you schedule your in-home health exam (if needed) and work with the insurance company to make sure your policy is approved as soon possible. When your policy is approved, we’ll contact you to see if you need to make any changes to your policy before it is issued and mailed to you.
Our agency is owner-operated and we’re here to answer to you, rather than shareholders or investors. We do not have sales quotas – your satisfaction and referrals are what keeps us in business.
Give us a call today at: 855-902-6494, or request a free quote online below to compare rates from dozens of companies in less than a minute.