Life Insurance Q&A: What Everyone Needs to KnowSubmitted by Reby Advisors | Certified Financial Planners | Danbury, CT on November 16th, 2018
Q&A with Rudolf Weiss, CFP®, November 16, 2018
Considering life insurance? How does it work, do you really need it, and how much do you need? Learn more about it with CERTIFIED FINANCIAL PLANNERTM professional Rudolf Weiss in this helpful Q&A session.
How much life insurance is necessary?
It depends on many factors: whether you have children, if you’re married, what your spouse’s income capabilities are. We try to match the death benefit to the beneficiary’s needs, whether that means term insurance (the most basic and inexpensive plan) fits the bill or you need to take more life insurance upfront.
What is variable universal life insurance?
With this plan, you can build up a lot of valuable cash value. However, that cash value isn’t guaranteed—it’s variable. Normally, though, you can guarantee the death benefit for a certain period of time, no matter what happens with the market.
What’s the biggest mistake people make in regard to life insurance?
Often, people with young children don’t get enough insurance. They don’t realize how expensive it would be to raise kids by yourself for an extended period. It’s a shame, because term insurance, if you’re healthy, is extremely inexpensive if you buy it when you’re in your 20s or 30s.
Are there big differences in rates between companies?
Yes. It’s very important to quote out several different plans. My guess is, if you run 10 companies for the same type of policy, you'll have a range of 20%. So, if you somehow end up in the worst company in that group, you're probably paying 20-25% more than you would if you had picked the best company. It pays to work with a company that has a broker who can look at different companies and shop around.
Do you ever see anyone who is “over-insured?”
Sometimes, but it’s rare. Sometimes people may over-buy certain types of insurance like group life insurance, especially through the workplace, which usually isn’t cost-effective. But in most cases, the biggest mistake with life insurance is that people under insure.
If you would like a complimentary review of your coverage to determine whether you have enough insurance or you're paying too much, contact us today at (203) 790-4949.