Buying life insurance can bring up a lot of questions. Whether you are meeting with a life insurance agent for the first time or have been considering a policy for a while, here are the top 5 most common questions asked when buying life insurance:
- How much is it going to cost me?
- What if I don’t qualify?
- What if my health changes or I become disabled
- What happens if I can’t pay my premium?
- Are there any risks?
Cost of Buying Life Insurance
What determines the cost of a whole life insurance policy? Typical life insurance policies are designed solely around the death benefit.
At Paradigm Life, we take a completely different approach. Our policies are built specifically for cash value. This means that you can now borrow against yourself and the death benefit is an added bonus that provides you with another layer of protection. Your Paradigm Life agent will build your policy, based on the amount of cash value you would like to have in your own personal ‘bank.’
Therefore, the cost is catered to you.
Qualifying for Life Insurance
Since this is a life insurance policy, there is a required health qualification. The insurance company will conduct a “health assessment” as a part of the application process. As your contract will last for your entire lifetime, the insurance company will do their due diligence to make sure they feel comfortable before officially giving you an offer of coverage.
In the event that the insurance company denies coverage based on your health, you will still have options. Your agent will discuss with you how buying life insurance is an asset; one that can be purchased on loved ones, should you be determined uninsurable.
When you have a contractual agreement with an insurance company, through a whole life insurance policy you are protected against future health changes. This means, should your health decline, your insurance rating will not change.
What if your health improves? In this case, the insurance company will consider changing your life insurance policy to a better rating. (An example of how a whole life insurance policy rewards the better life choices you make).
In addition, to protect yourself in the event that you become disabled, your life insurance policy can be written with a disability rider.
Mutual life insurance companies offer a huge amount of premium flexibility. Here are a few examples:
- You may choose to satisfy your premium from cash value
- You may choose to finance your premium from an outside source (i.e. line of credit)
- You may choose to pay just the base pay premium, instead of the full base and PUA (paid-up additions) premium.
- You may even choose to offset the entire premium completely
As the owner of the policy, you have the right to determine how much you pay into your life insurance contract. To see what premium flexibility you have available in your policy, contact a Paradigm Life agent.
Risks of Buying Life Insurance
Considering there are other investment vehicles that offer much more risk; it’s safe to say that whole life insurance is on the low end. Properly structured whole life insurance provides a rate of return that is not determined by its performance in the market, making the rate of return consistent. This is one of the many benefits of owning a whole life policy, you receive a steady rate of return that can even be used to cover your premium payment.
Dividends (though not guaranteed) can also cover the cost of your premium. And should you decide that you no longer wish to participate in your policy, you will still be able to take your cash value with you.
Every Paradigm Life Wealth Strategist is prepared to discuss with you any questions you might have about whole life insurance and its cash value. They will review with you how permanent life insurance is the best way to safeguard your personal economy, sheltering your money from excessive taxes and inflation, as well as showing you how properly secure wealth.
At Paradigm Life we can customize a policy to fit your financial situation. Our expert Wealth Strategists are available to answer your questions and show you customized illustrations, outlining an individual plan of action to help you achieve your goals.
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