Molly’s Musings

She's not Dear Abby, but she does get a lot of interesting questions from folks just like you!  

life

Frequently asked questions...

You asked. We answered.

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Life

How do I determine how much of a death benefit I need?

As a general rule of thumb we use the DIME method. Click on our calculator to figure out what amount would be right for you. The goal is to find an amount that will allow your loved ones to mourn and heal without worrying about finances. This amount should equal the sum total of all the various life insurance policies that you have in force.

How do I determine the right death benefit for a child?

If you are purchasing a universal life policy on a child somewhere between $25,000 & $100,000 is a good place to start. Once the child becomes a young adult and leaves the home the policy can go with them and they can decide if they want to increase the death benefit or buy an additional term life policy.

How do I determine the right length of time for a term life policy?

Part of this is determined by your budget and part of this is determined by how close you are to retiring. If you can afford it and you have longer than 20 years to retirement you should purchase a 20 year (or longer) term. The goal is to have a term policy to take you through to retirement when you can convert to a universal life policy.

How do I use universal life to protect to total of my estate?

By working with your accountant you can determine what your estate taxes will be and that is the amount that we’ll use to establish your death benefit.

What is the difference between term life insurance & universal life insurance?

Term life insurance lasts for the term you purchase- typically 5, 10, 15 or 20 years provided you pay the premiums. If you die during the term your beneficiaries will get the amount you purchased in the beginning. Universal life insurance can last as long as you do provided the premiums are paid. In addition to the life insurance there is a cash value account that a portion of your premium goes into.

Which is a better purchase term or universal?

It really depends on your stage of life. Universal life is a great product to buy on kids because they get a great rate and you can build the cash value account while they’re young. Universal Life is also a good purchase for someone who is retiring and wants to insure their nest egg for the next generation. Term life makes sense for everyone in between. When you’re in your 20’s & 30’s your debt will be high, but term life insurance is based in part on your age so it’s less expensive to buy a higher benefit.