Life Insurance Questions

Why should I have life insurance?
Below are a few facts about what happens when a family member passes away.

Fact: The early death of a family member could happen to you. None of us really think it will happen to us, but it can. The chances are really far greater than you might think. You are more likely to lose your home due to the death of a family member than due to a fire or a tornado. Read the obituaries for just 1 month and see how often this catastrophe strikes.

Fact: The death of a bread-winner causes extreme financial hardship.

• 50% of all widows spend some time on welfare.

• The widow's standard of living decreases 70%

• 67% of children living in poverty have single parents

• Few single parent children go to college

Fact: Most Americans are grossly under insured.  If you were given $50,000 would you quit your job? Probably not. Yet the average adult has less than $50,000 life insurance....and I guarantee if you die you will quit your job. Are you asking your family to accept a standard of living that is far lower than you yourself would accept? Your family is depending on you for a lot. Do you want them to do without all those things if you pass away?

I bought life insurance years ago, why should I think about it now?  
Your Life Insurance needs change so you must review your plan often. As your family situation changes your insurance needs change. The age of your children, the amount of debt you have, your standard of living and inflation all play a significant role in your insurance needs. Review your life insurance plan every 3 years to make sure you have what you need.

How much life insurance do I need?  
This is the simplest method there is, but it is amazingly accurate. Just take your current gross annual income (before taxes) and multiply it times 12 and subtract your investments.  Another simple method is to take your gross annual income times 8 and add all your debts.  Either method should get you close.  Of course, there are more complicated methods available and if you would like to review them, just contact us.

What is Term Life Insurance?
Term Life Insurance is the simplest and least expensive type of life insurance.  You pay a premium, and if you die during the "Term" you paid for, the company pays your beneficiary the death benefit.  There is no cash value or saving component to it.  You can usually lock in the premium for periods of 10, 20 or 30 years, but eventually the cost of term insurance will go up as you grow older.  At some point, usually around age 60, it becomes so expensive that you will not renew the policy.

So If It Gets Expensive When You Are Old, Why Buy Term Insurance?
When you are young and your family is growing you need a lot of life insurance to provide for them if you pass away.  This is also the time of your life when money is the tightest.  Term Insurance is very inexpensive during this time, so it actually works great.  You get a lot of insurance for a low premium!  Hopefully when the cost of the insurance get high, your children will be raised and you will be out of debt so you need for life insurance is greatly decreased.

What is Universal Life Insurance?
Universal Life Insurance is a complex, but flexible product, with few, if any guarantees.  You can think of it as a term insurance policy, with a savings account attached to it.  It is too complicated to fully explain here.  But, it is a great type of insurance to consider if you want the coverage for the rest of your life.  However, you must be very careful and trust the agent completely, as it is a product that can be manipulated easily.

What is Whole Life Insurance?
Whole Life Insurance is another product designed for situations where you want the coverage for the rest of your life (Whole Life).  It is rather expensive, and not very flexible, but it is entirely guaranteed.  Again, this is something you need to discuss with a competent agent whom you thoroughly trust.

Where are most of Preferred Insurance Center's clients located?
Most of our clients are located in Coldwater, Celina, St. Henry, Maria Stein, and Fort Recovery. We cover all of Mercer County and Auglaize County.  Of course, we can insure your personal auto anywhere in Ohio or Indiana.

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