By Michael Cadet
My father passed away this past Tuesday Morning November 18th 2014 at 3:36 am. Lenau Cadet was 72 years old. He really didn’t have any extensive wishes as far as a memorial service. He had few friends and wanted only his closest relatives and loved ones who knew him best to unite and reflect on his life. Even though I didn’t talk much I enjoyed the company of my family during our mourning.
I write this to bring up life insurance and the purpose of it. Life insurance, simply put, is to replace an economic loss. Nothing more, nothing less. It’s not to act as a tax-free loan or fund your retirement account, but simply to replace an economic loss. Regardless of how much coverage you buy, it will never replace an emotional loss.
Most people will come to find a Term life insurance policy is more appropriate vs a Variable, and here’s why: Term life insurance is a policy you purchase for a specified amount of time, while Variable life insurance allows policy holders to invest their premiums they pay every month in to mutual funds offered by the insurance company. I’ll go into further detail about the differences between these two policies at a later date.
The best way to determine how much coverage you would need is to calculate what the economic loss would be if you lost a loved one. If you conclude the loss of a love one would not create an economic loss or you can absorb a large economic event yourself then I wouldn’t justify obtaining any coverage.
Life insurance is not a creator of wealth. Wealth is obtained through the relationships you build and sustain and the richness that experience brings. A person with time is wealthier than an old person with money. Time provides the opportunity to capture your destiny- whatever that may be. Remember to always tell your loved ones that you love them because tomorrow is never promised. As always, make your next move the best move!