Life Insurance can be defined as a transfer of risk from the individual to a group. Also there must exist a sharing of losses by the members of the group. The group is created by an insurance company’s pool of customers or insureds. An insurance contract is an agreement whereby the policy holder pays a stipulated premium to the insurance company in return for which the insurance company agrees to pay a defined amount of money if the person whose life is insured dies or suffers an illness or other disability during the term of the policy.
Life insurance is a bad investment. Why should I put my hard-earned money into it? No one likes to pay for insurance. And no one should convince you that it’s an investment. Instead, it is a very versatile financial asset, purchased for benefits to be paid in the future. Remember, life insurance is for your peace of mind now – and for your loved one’s financial security in the event of your untimely death. (Seldom does a beneficiary refuse a death benefit check!) My investment should be all I need to care for my family when I die or if I’m disabled.
For those blessed with a long, healthy life, that can certainly be true. The catch is that people can die or become disabled before investments have matured to that level. Insurance purchased today takes care of your family’s needs – today and tomorrow.
My spouse can take care of herself (or himself). Besides, if I am gone, won’t family expenses be cut considerably?
Not really, many expenses continue as always, such as mortgage payments, children’s tuition, etc. And even if your spouse can earn a good salary, other needs may require outside services to ease the burden of your absence for your family.
I know I need life insurance to care for my family in the event of my untimely death. But how much and what kind to I need?
That depends on your family’s individual needs. You should consider the amount of death benefit you want for them, compared to the level of premium you can afford. Are your family needs long term or short term? Are your children very young or in college? Are there other factors to consider?
What if I develop a long-term illness? Doesn’t my health insurance or Social Security cover long-term care?
Only when your personal assets are used up. In other words, when you are bankrupt. The gap between most people’s personal assets and long-term care needs is often wide indeed, and the financial risk is huge. Long term care insurance and disability insurance preserve your personal assets and lessens the stress that long illnesses can place on finances and emotions.
Can’t I just grow old and become a burden to my children?
This is funny – until it really happens. Few people really want to make life difficult for loved ones. Careful preparation for illness and old age is one of the most thoughtful acts parents can perform for their children.
I’m insurance – poor.
You know, I’ve never been sure what that means, but in general it is a catch phrase that tells me that you do not want to face the possibility of sickness for injury, or the reality of your demise. And you will not take responsibility for your finances. In my wife’s words which may apply. “I’m far too pretty to worry about such things.”
The Callaway Approach
Although insurance itself should not be viewed as a true investment, a good insurance program is crucial to your total financial plan. No one wants to by insurance. But without adequate insurance coverage, you or your loved ones might very well have to sell significant assets just to pay expenses. Callaway Financial Services offers various types of insurance, including:
- Life Insurance
- Disability Insurance
- Long-Term Care Insurance
- Fixed Annuities
- Equity Indexed Annuities
- Variable Annuities
The Callaway Approach brings years of experience and a solution-oriented philosophy to your insurance needs. We are ready and willing to listen to your unique circumstances and offer recommendations based on your total financial picture. The Callaway Approach places your current needs and your lifetime goals at the heart of the plan. If you have no insurance at all, or if you’ve experienced a major change in your life, it’s time to review your needs. Marriage, divorce, birth of a baby, death of a spouse, purchase of a new home, preparation for college, retirement, or other life events- any of these can outdate your current coverage. Contact us for a no-obligation review of your insurance program.