Life Insurance... The Reality

It is always interesting to listen to my friends, associates, and acquaintances of multiple age groups discuss the types of life insurance that they own. My friends in their 20's and 30's either don't own it yet, or just bought some term life, or perhaps even a small amount of whole life insurance when they started a family. My colleagues in their 40's and 50's have policies of all shapes and sizes. They own VUL's (variable universal life) that they bought during the market booms, some term life, some universal life, as well as some whole life insurance. My clients, friends of my parents, and colleagues in the 60's, 70's, and 80's all have as much whole life insurance as they can own. They have all converted as much of their term life as allowed into whole life insurance. Which makes me wonder, why do all the people in their retirement years want to purchase whole life insurance?

“I have yet to meet a widow, or children who recently lost a parent, who said that they thought their husband or father bought too much life insurance!”

When it all comes down to it, various types of policies have multiple living benefits. You can use different policies during retirement, and some accumulate cash values in different ways, and some policies have multiple different riders that allow the policy to add value to a consumer. In the end, there is always one motivation for buying a life insurance policy, because you want to leave your loved ones with money. If you were to interview a terminally ill person, almost all of them will tell you they wished they were able to purchase more life insurance for their family.

So it does not matter what kind of life insurance benefits you purchased throughout your life when you are on your death bed, all that matters is that you have a policy in-force that is going to leave money to your family. One of them that is going to be there is a whole life insurance policy. When you are 80 you no longer think about covering your mortgage, putting the kids through college, or paying off debts. People who are later in life only own life insurance because they want their family to receive money when they pass away.

Next time you sit down with an agent, and are trying to decide on the various types and amounts of insurance just ask yourself one question. “How much money do I want my children to receive when I pass away? How much would I want them to have if there was no cost to owning this policy?” You will find that very few people in their retirement years ever lapse their life insurance policies. Knowing this, why not start by purchasing a policy you know is going to be there when you need it at the end of your life.

Read Bill Olmsted's Other Articles

Should You Buy Term or Whole Life Insurance?
Top Ten Things to Ask Your Agent BEFORE Purchasing Life Insurance
What Company Do I Choose - Mutual or Stock?
Whole Life Insurance for the Small Business Owner
Whole Life as a Retirement Account Diversifier
Does Permanent Insurance Make Sense?
Why Whole Life Insurance from Guardian
Whole Life or Universal Life - Which Type of Permanent Life Insurance Should You Buy?
How Much Life Insurance Do I Need?
Whole Life Insurance for Kids
Whole Life As Part of Your Financial Plan
What is a Dividend?
Using Life Insurance to Leverage a Financial Gift
How To Accelerate the Cash Value Growth Within a Whole Life Policy
Modified Endowment Contract (MEC)
Supplemental Retirement Planning Using Whole Life Insurance