Lou Holtz says, "Ladies and gentlemen, you are not selling life insurance. All you're trying to do is help people solve problems before they arise."

 


 

Personal Use of Life Insurance

  

  

  • Education Funding
    • Insurance proceeds may be used to pay for children's education expenses so they can remain in school, or sometimes  a surviving spouse that has worked in the home caring for children will need to receive education or traning in order to re-enter the job maket.
  • Survivor Protection
    • The death of the primary wage earner will usually stop the flow of income to a family. Equally financially devastating can be the death of a nonworking spouse who cares for minor children. Life insurance can provide the funds necessary for the survivors of the insured to be able to maintain their lifestyle in the event of his/her death. Planning for survivor protection requires careful examination of current assets and liabilites as well as determining what survivors needs may be.
  • Estate Creation
    • A person may create an estate through earnings, savings, and investments over a period of time, but all of these methods require disciplined action. If time is not available, they all will fail. The purchase of life insurance, in the event of death, creates an immediate estae. Estate creation is especially important for young families that are getting started and have not yet had time to accumulate assets. When an insured purchases a life insurance policy, he/she will have an estae of at least that amount the moment the first premium is paid. There is no other legal method whereby an immediate estate can be created at a small cost
  • Retirement
    • Social security retirement benefits are rarely sufficient to allow retired individuals to maintain the same standard of living as when they were working and had an income flow. Life insurance may be particularly useful for those who do not have a retirement plan at their place of employment and need to provide for their own income supplement during retirement, the cash values may be used to supplement social security retirement benefits.
  • Cash Accumulation
    • Life insurance may be used to accumlate specific amounts of monies for specific needs and guarantees that the amount of money will be available when needed. An example of a life product that provides cash accumulation would be a whole life policy that offers an insured living benefits in the form of cash values.
  • Liquidity
    • Liquidity in life insurance refers to availability of cash to the insured. Some life insurance policies offer cash values that can be borrowed at any time and used for immediate needs.
  • Estate Conservation
    • Life insurance proceeds may be used to pay state inheritance taxes and federal estate taxes so that it is not necessary to sell off assets from the estate to pay these costs.