Life Insurance Myths
- MYTH: Life insurance policies cannot be financially managed after they are issued.
- TRUTH: Many life insurance policies can be managed to minimize the cash payments required from the policyowner and maximize the value to the policyowner. At Living Wealth Advisors, we provide our clients with several options for paying the premiums under your current life insurance policies.
- MYTH: The full bill from an insurer always needs to be paid.
- TRUTH: For most permanent life insurance policies (as opposed to term insurance), a policyowner can choose to pay a different amount of premiums in order to maximize their financial needs regardless of the amount billed by the insurance company. We have found that many policyowners have enough accumulated value in their policies that they can either take a break from premium payments or make smaller payments for a lengthy period of time; however, if the insured individuals live long enough, the policyowner may eventually have to pay premiums greater than those they originally anticipated.
- MYTH: The beneficiaries of a life insurance policy receive all of the value under a policy when the insured dies.
- TRUTH: For many permanent life insurance policies, all accumulated value is lost and not paid to anyone following the death of the insured. We can provide our clients with estimates of how much these amounts will be each year under their existing policies, and we will provide our clients with recommendations for alternative premium payments to reduce or minimize the amount of value a policyowner may lose upon the death of the insured.