Life Insurance

The last love letter you leave to your family . . .

At the same time that many individuals look into creating estate planning documents, they also look at purchasing or updating life insurance. Life insurance is a non-probate asset. This means that even if a Will is drafted, when an insurance policy is paid out to the decedent’s beneficiaries, that amount will not be included in the probate process.

Upon creation of a Will, parents may want to consider changing the beneficiary designation on any life insurance policies they own to name the Testamentary Trust for Minors found in their Will rather than directly naming any minor children or their guardians as the beneficiaries of the policies. This simple step ensures that the funds from the life insurance policy will be paid to the Trust and managed by the named Trustee on behalf of the minor children and be distributed along the terms set out in the Will.

Failing to change the beneficiary designation to the Trust after creating a Will may result in the Guardian receiving the funds from the policy to hold in care for the minor child. Depending on your unique circumstances, it may be better for these funds to be managed by the Trustee. Check with your insurance agent to find out more information about changing beneficiary designations.

Life Insurance Basics

  •  Who needs life insurance?
    • Married couples
    • Every parent
  • Why buy life insurance?
    • Final Expenses
    • Debt coverage
      • mortgage, business loans, college loans, car loans, home equity line of credit, credit card debt, other loans
    • Income Replacement
      • Adequate coverage seeks to replace the income a person would have generated over the course of his or her lifetime.
        • college education costs for children, tax bills, basic food, clothing, phone, & electricity bills
  • How much do I need?
    • Contact an independent life insurance agent to determine an accurate amount of coverage for yourself and your spouse.
  • How much does it cost?
    • Premiums are based on a person’s age and health.
      • For example, a healthy, non-smoking 35 year old male could purchase $500,000 of 20 year term insurance for only $25/month
  • What is the difference in term and whole life insurance?
    • Term Insurance
      • Low cost coverage that lasts for a length of time
        (i.e. 20, 25, 30, or 35 years)
    • Whole Life (Permanent Insurance)
      • Coverage that lasts a lifetime and builds cash value

Life insurance is very individualized. Always work with an independent agent to determine the amount and type of coverage that best meets your needs.

The above basic information on life insurance was provided by:

Lisa Anderson
Licensed, Independent Life Insurance Agent
coveragewithlisa@bellsouth.net
(910) 452-2956
(910) 619-6430