FINANCIALLY
Speaking
What Are Your
Reason’s For
Not Buying Life
Insurance?
by Daniel T. Newquist,
CFP®, AIF®
Daniel T. Newquist, CFP®, AIF®
is a Principal Wealth Advisor
with RNP Advisory Services, Inc.,
in Morgan Hill with over 18
years experience advising clients
on their personal wealth, retirement
planning, insurance, and business
planning needs. Born and raised in
Morgan Hill, Dan is available for
private consultations and speaking
engagements. Investment advi-
sory services offered through RNP
Advisory Services, Inc. – a regis-
tered investment advisor. Securities
offered through Foothill Securities,
Inc., member FINRA/SIPC, an unaf-
filiated company. Visit his website
at www.RNPadvisory.com or call
408-779-0699.
D
espite the fact that most people
appreciate the value of life
insurance and believe t hey need
more coverage, or wouldn’t mind
owning additional life insurance, they often
never purchase it.
Life insurance plays a critical role in
protecting you and your family from potential
risks, so why wouldn’t everyone buy it?
Thinking you need to have all the answers about
which type of life insurance is best for you is sort of
like needing surgery and thinking you need to know
which type of scalpel to use. That’s the surgeon’s
job. In the same respect, the right insurance
professional can guide you through the process
of selecting the policy that best suits your needs,
budget, and objectives. They can educate you and
answer your questions.
It’s Not a High Priority
Compared with Other Expenses
For many underinsured people, it’s not so much
that they don’t want to purchase the life insurance
they need – it’s just difficult to find the extra dollars
to pay for it. Buying life insurance you can’t afford
benefits no one and you’ll eventually discontinue
the policy.
That’s why it’s important to purchase a policy
that meets your needs and your budget. There are
many types of life insurance
The Subject Is Uncomfortable
available, including term
If you really don’t like to think
life insurance policies and
about death, you are not alone.
Life insurance plays a
various types of permanent
Death is an unpleasant subject,
(cash value) life insurance
and many people say that the
critical roll in protecting
policies. Term policies, often
very thought of starting the life
you and your family from
the most affordable, provide
insurance buying process makes
life insurance protection for
them feel stressed out. So how
potential risks, so why
a specific period of time.
do you counter this? Think of
wouldn’t everyone buy it?
If you die during the cover-
life insurance as contingency
age term, your beneficiaries
planning, protecting your family
receive the death benefit.
from the uncertainties of life.
If you live to the end of
Recognize that life insurance
the term, the policy simply terminates, unless it is
is really about life and love, about helping to
renewable and you renew it for a new period.
ensure a positive quality of life for your family if
Permanent insurance policies offer protection for
you die prematurely.
your entire life, regardless of future health changes,
provided you pay the premium and keep the policy
It’s Confusing and I Don’t Know Where to Start
in force. As you pay your premium, a portion of
If you don’t have a clue about which type of
each payment goes toward building up the policy’s
policy is right for you or how much coverage
cash value, which may be accessed through policy
you need, join the club. Few truly understand
loans or withdrawals. Keep in mind that loans or
life insurance, why you need it, what type of
withdrawals reduce the cash value and the death
policy is best, how much you need, when and
benefit, and could cause the policy to lapse if not
how benefits are paid, how benefits may be
managed correctly. The cash value continues to
taxed, and more. That’s okay – it’s not your
grow, tax-deferred, as long as the policy is
job to know everything about life insurance, so
in force.
don’t let that stop you.
It’s Not A Priority
People often say, “I know I need it, I’ll get
around to it, but not today.” With all the things
you’ve got to do, buying life insurance can
come off as a low priority–just one more thing
you ought to do. Add to it the fact that the
whole idea of discussing life insurance isn’t a
whole lot of fun, who wouldn’t rather take the
dogs for a walk on the beach?
THE BOTTOM LINE
It’s easy to understand why people tend to put off purchasing the life insurance they know they need.
However, those who do purchase life insurance do so for good reason including: to provide continuing
income for family members, to pay off debts you leave behind, to pay final expenses, to provide
an estate for your loved ones or to leave money to charity. Life insurance plays an important role in
ensuring that your family will have enough money to meet their financial obligations in the event of your
death. People who do address their insurance needs tend to focus on the positive aspects and the idea
of meeting their responsibilities to provide for and protect their loved ones from potential risks.
This article is intended for educational purposes only. It is not intended as investment advice.
Always consult your financial or tax-planning professional for guidance with respect to your specific situation.
G M H T O D A Y M A G A Z I N E
MAY / JUNE 2015
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