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 Life Insurance

Why should you own life insurance?

The most interesting word above is own.  That is because in 1913 the Supreme Court ruled that life insurance is property.  It is owned by the purchaser and is a unilateral contract.  If you are truthful on the application and the policy is issued, the insurance company cannot change any of the terms or conditions in your contract without you consent. It is a very important part of your financial assets.

1. The most common reason for life insurance is to provide large sums of money in the event of a premature death of a husband or wife.

To refresh some memories:       a) To pay off a mortgage

                                                      b) To pay off cars

                                                       c) To replenish the income of the deceased

                                                       d) To pay for child care expenses

                                                       e) To assure daughters and sons are able to have Prom dresses and Sports        equipment to participate in childhood

                                                        f) To provide college or technical training funds

                                                        g) Add your own reasons (Why not write them on a piece of paper)

Life insurance is a unique form of property that springs into life bringing money at a critical time when it seems that the only thing coming at you is another bill to be paid after an untimely death.

2. One of the most important and almost universally overlooked value and use for life insurance occurs after retirement.  It is used by the surviving spouse to replace from 1/3 to 1/2 of the Social Security income that is lost on the death of the first spouse. Given that for a majority of Americans, Social Security makes up a large amount of their retirement income, the proceeds of a life insurance could make the difference between a comfortable life and one of isolation trying to make ends meet. 

This leads us to the last discussion.

3. What kind/type of life insurance should you own?

Lets look at it in a different light. Look at it like a mortgage. You pay a little payment each month for the big payoff at the end. Unlike a mortgage that requires you to complete the total payments before the reward. The life policy self completes at your untimely death and may even pay the mortgage.  However, if you are financially able to purchase a cash value life insurance policy and the devistating event does not occur, you will have a substantial build of cash value in the policy that you can maintain for the Social Security income replacement as noted above. If your cash flow doesn't support a cash value policy there are term policies available to fill the gap until the income cash flow improves.

Thomas F. Kistner and/or National Associates, Inc. of Texas are not affiliated with or endorsed by the Social Security Administration or any other government agency.Guarantees based upon the claims paying ability of the issuing insurance company.

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