Insurance Planning Is A Crucial Part Of Your Financial Freedom

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Insurance Planning Is A Crucial Part Of Your
Financial Freedom
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• Insurance Planning is another one of those
  confusing topics that a lot of people like to
  avoid until it is too late. A prudent person will
  embrace the topic and learn whatever is necessary
  to protect their interests and secure their
  financial freedom. One small unprotected
  financial disaster could wreak havoc with your
  financial house. With proper insurance planning,
  you get to sleep comfortably at night. Without
  it, one small calamity could have a domino effect
  causing your financial freedom to be in serious
  jeopardy.

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• The first of the four pillars of Insurance
  Planning protection that you need to consider is
  Life Insurance. If you have loved ones or anyone
  in particular that depends on you for support, it
  would behoove you to get Life Insurance. As life
  in general has so many twists and turns, no one
  can predict the future. The last thing that you
  want to see happen is to have those close and
  dear to you grieving when you are gone and
  simultaneously lose any means of financial
  support and financial freedom.

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• There are two basic types of Life Insurance
  policies and they are Term Insurance or Whole
  Life Insurance, which has several variants. Term
  is the simplest type of policy which offers
  protection for a set "Term" such as 5 or 10
  years. Some options to look for when buying Term
  include 1) guaranteed renewal feature, 2)
  convertibility to a more permanent policy, and a
  3) death benefit which may increase, decrease or
  stay the same. The best candidate for a Term
  policy is a person looking for a simple,
  straightforward means of protecting their
  beneficiaries for a set period of time otherwise
  known as "The Term." If you buy the policy when
  you are young and healthy, the premiums will be
  very low such as only a few hundred dollars for
  500,000.00 worth of protection. You would want
  the term to last until some major life event
  occurs such as when your mortgage is paid off or
  when your children leave the nest or when your
  retirement income starts to come in and you have
  reached financial freedom.

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• Whole Life Insurance, as it's name implies,
  covers you for your whole life. It comes in many
  "flavors" such as 1) single premium whole life,
  where one lump sum payment covers the whole
  policy, 2) Interest Sensitive Whole Life which
  has an increasing death benefit to help cover
  inflationary costs, 3) Universal Whole Life, a
  type of policy that includes tax deferred savings
  as well as a choice of premium plans and 4)
  Variable Whole Life, a policy that has an
  investment component tied to the stock market.
  These are just a few of the most popular
  variants. One common feature in all of these
  whole life choices is a build up of cash reserves
  that you can borrow against should your need
  arise. If you do not touch the cash value, it is
  possible to get to the point where this pool of
  money has built up high enough to cover the
  premiums for you going forward. At this point you
  would not have to lay out any further money to
  keep the policy in full force.

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• Traditionally, the return on this cash value (as
  an investment percent) is lower than you could
  capture using other financial instruments.
  Because of this, most financial professionals
  would advise you to keep your insurance planning
  and your Investment Insurance Plan separate. In
  most cases, the prudent course of action would be
  to "buy Term and invest the rest." The rest
  represents the amount in premium you would pay
  for a whole life policy above the premium for a
  term policy. Investing this extra amount of
  premium above the purchase of a term policy
  should certainly enhance your overall financial
  picture. This is one of the many ways that will
  help you reach true financial freedom!

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