How to Pick the Right Policy in Turbulent Times
Not sure where the economy is going? Exhausted by the ups and downs of an erratic stock market? Trying to decide which life insurance can best address your insurance needs in these changeable economic times?
With stock market highs and lows and talk of a recession, one thing is certain: the economy is lurching through uncharted terrain. So how do you decide which type of life insurance policy is the most appropriate for you in this uncertain economy?
When looking for life insurance to provide financial security for you and your loved ones, consider these three points:
1. If you own an equity-based insurance product, such as variable universal life insurance (VUL), meet with your NYLIFE Securities Registered Representative to review your current allocation and adjust it if necessary to ensure it’s in line with your objectives, risk tolerance and time horizon.
2. Rethink term life insurance. With coverage that expires, many financial professionals believe that term life insurance has a number of shortcomings when purchased to meet long-term needs. Mark Pfaff, Executive Vice President of U.S. Life Insurance Operations at New York Life Insurance Company, compares term life insurance to an adjustable-rate mortgage (ARM). “People buy ARMs because they seem cheap in the beginning,” which is the same reason people buy term insurance.”
3. Consider whole life as a safe, stable option if you have a need for more permanent insurance protection. “Whole life can actually end up being the better value in the long run,” says Pfaff, “because whole life has cash value, which could be tapped” to cover living expenses in an emergency. Whole life insurance provides rock-solid simplicity and built-in guarantees1. Its guaranteed death benefit may replace the income of breadwinners who die prematurely. Access to its cash value via policy loans2 provides funds for first home down payments, college tuitions, and to supplement retirement income as your insurance needs decrease. Whole life insurance has a well-deserved reputation for reliability and dependability.
Is whole life insurance the right life insurance for these uncertain times? It might be, especially if you need coverage that offers:
Lifelong insurance protection. Unlike with term life insurance, your coverage will not expire. Whole life is a permanent life insurance policy. It is designed to provide coverage for your entire life. As long as all required premiums are paid, coverage will not expire in older years…making it an ideal long-range planning tool.
Fixed, level premiums for life. Your premium remains constant and can never be increased. Guaranteed! Plus, under a number of policy options or through Custom Whole Life Policies, it is possible to customize your premium-paying period, such as to age 65. Finally, if your situation calls for it, you have the option to surrender your policy and use the cash value to purchase a reduced amount of paid-up life insurance coverage.
Fixed, level death benefit. The death benefit is selected at issue and will not decline in later years. As long as the policy remains in force and there are no loans against the policy, the death benefit will be paid—either as a death claim or, if the insured is still living, at policy maturity, when the policy endows for its full face amount. In this respect, the policy always pays—guaranteed. At the same time, it may be eligible to receive policy dividends 3, and depending on the dividend option you choose, the death benefit may actually increase over time.
Guaranteed cash value accumulation … without risk or speculation. The cash value in a whole life policy accumulate, guaranteed.
Cash Value Loan provision. The cash value within a whole life insurance policy can be a valuable source of funds for such items as a house down payment or college funding. You can borrow the cash value at any time.2. This loan is not dependent upon the approval of a financial institution’s loan officer, and is not subject to a strict repayment schedule. Which life insurance policy is the most appropriate for you during these times of an uncertain stock market and talk of recession? That’s something only you can decide.
Talk to your New York Life agent about the choices available to you, including whether a cash value policy such as whole life insurance has a place in your life insurance policy portfolio.
1 Guarantees are based upon claims-paying ability of the issuer.
2 Loans against your policy accrue interest and decrease the death benefit and cash value by the amount of the outstanding loan and interest.
3. Dividends are not guaranteed.
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