The Lazy Man's Guide to Life Insurance

Today I want to talk about some life insurance basics in layman’s terms. How does one go about understanding life insurance industry and products. There are so many companies, so many options. Where should you start??Talk to a carrier, talk to an agent, check the internet, talk to your parents, friends, acquaintances? I've been in the industry for a long time, since birth to be exact. I've seen a lot of changes over the years, and it is hard to keep up if it's not your business. Many people think that life insurance is a boring subject. But it's not. To me, it's a necessity and I like having fun with numbers and statistics. I will tell you how I go about buying life insurance. I will also tell you about a life sales techniques and products.

Let's start with the basics. How many types of life insurance are there? Easy, 2 types. Actually 3 if you count the hybrids. Yes, as many carriers as there are, and as many policy types there are, there are only 2 types of life insurance. Term life and Permanent life. Term is exactly what it sounds like, it is an insurance that lasts a certain number of years. Permanent is an insurance that lasts for the duration of your life. And there you go, that's the Lazy Man's Guide to Life Insurance, Just kidding of course. Now that I defined the basics, we can together look at the different types of life insurance policies in each of the 2 categories and how to find the right one for you.

So, where do you start? First you must decide what do you need life insurance for. Just the various uses of life insurance could be made into a 1000-page book. I'll just focus on the most common and obvious:

-?????????Family - to provide for your children, loved ones in case something happens to you

-?????????Business - to fund the business if something happens to the owner/partner

-?????????Mortgage - to provide funds for the mortgage

-?????????Retirement - to fund retirement with the bonus of instant estate

-?????????Burial - to cover the costs related to your passing

-?????????and the list goes on and on

Each of these needs has a specific product related to it and it is only a matter of picking the right one. How to go about it? Well, there's a lot of information on life insurance out there. Where do you start? Most people start with Google.?You ask Google and get an answer. You get a link, click it, fill out some basic info and get a quote. Easy, done, time to have fun, right? Not so quickly. Problem here is fact finding. Did the server/online service perform a thorough job? Did it ask you the right questions? How personal did it get and how personal can an online form really get? It is my firm belief that an in-person consultation beats out an online form any day of the week.

This brings me to the next step. How to find the right person to trust? Just like in any field, you have the good ones and the bad ones. Usually, the bad ones are the loudest.?Your first step is to reach out to a trusted source. Ask your friends, colleagues, possibly family members. If you can't find anyone, then just reach out to me.

But in all seriousness, talking about life insurance is not something that is to be taken lightly. You will have to share everything with the person you will be talking to. They are basically your therapist. So, who do you trust? That's what life insurance sales come down to. And if it is someone you never met before, do some research before entrusting him/her with deeply personal information and matters. You don't want to regret disclosing these later.

This trusted advisor will guide you through the entire process. They will ensure you are making the best decision for to meet your needs. They will help you understand the pros and cons of each decision and policy you decide to take.

As far as products, I recommend looking at both term and permanent products. Simply because, when you are young and want to protect the future of your family for example, term provides a good chunk of money very cheaply. It's a great way to protect your family for the long term. With permanent insurance, you'll always get a higher price, which early in your life may be hard to handle. As you get older, your term insurance will eventually expire, but that's when your permanent policy with cash value needs to take over. Best of all, once you are a policy holder, it is generally easier to get more coverage. The cash value in a policy will grow over time and should you run into hardships, you can borrow against it without impacting the original policy face value.

Well, that's my Lazy Man's Guide to Life Insurance. Hope you enjoyed it. I also hope you found it insightful and helpful. Next week I think I'll talk about some numbers and show some sample illustrations.?Follow me to get notification on all my newest contributions to the LinkedIn community.

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