The KISS Method – Keep Insurance Services Simple

 It is easy to become overwhelmed when buying life insurance.

 

It is also possible to go broke buying insurance. When an insurance agent is trying to sell you as much (and as complex) insurance as you are willing to pay for, simply remember that the primary purpose of buying life insurance is to reduce the financial risk associated with the loss of the spouse or significant other.

 

Remember the following reasons for buying life insurance. It does not need to be any more complicated than this.

 

Living expenses, college expenses, and debt settlement: For the spouse or partner, life without the other person will be hard enough. To help that transition, term insurance should be used to provide income for the spouse/partner, send the children to college and to settle all debts. Leaving the spouse/partner debt free is a great help in starting that new life under trying circumstances.

 

Estate liquidity: When anyone passes away, there are immediate expenses to settling the estate and making funeral and burial arrangements. To avoid the probable loss from the rushed sale of estate assets to cover these costs, a small whole life or UL policy purchased early on at low rates would help provide immediate liquidity.

 

The insurance agent will want to discuss the build-up of cash value in a whole life or UL policy as deferred savings or for future college education expenses, etc. as the primary reason for purchasing these types of life insurance. It is not. The purpose of the cash build-up is to pay for the policy in later years when term insurance becomes too expensive. The build-up of cash value in a whole life or UL policy is not an investment. Keep insurance services simple: insurance…is just insurance.

 

Agent competence and the stability of the insurance company: I encourage clients to find a reputable insurance agent who represents one of the better rated insurance companies. After all, you are betting that the insurance company will be there for longer than your lifetime.

 


Scott Anderson, CPA, CFP®, EA is the CFO and Vice President of Tax Strategies for GW Financial, Inc.  He earned his MBA from Stanford University.  Scott has spent over 35 years in corporate accounting and finance, including experience with several entrepreneurial opportunities in venture capital startups and corporate turnaround situations.  He has served as Chief Financial Officer for two emerging public companies and has his own active practice in tax, financial, and investment planning for individuals and small business owners.
 

Please reload

September 10, 2019

August 5, 2019

Please reload

Recent Posts
Categories
Stay up to date with our latest news and articles 

Main Office:

151 Kalmus Drive, Suite C-150 

Costa Mesa, CA 92626 
(714) 850-0534 

(714) 850-0934 FAX  

  • Wix Facebook page
  • LinkedIn App Icon
  • Wix Twitter page

Desert Office:

77-564 Country Club Drive #150

Palm Desert, CA 92211

(760) 350-5049

The information in this website is for U.S. residents only. GW Financial, Inc. described in this website is registered only in the United States and the information on this website does not constitute an offer to sell, or a solicitation of an offer to purchase funds either in the United States or to persons outside of the United States. 

 

Content on planretire.com  is protected by applicable copyright laws. No permission is granted to copy, distribute, modify, post or frame any text, graphics, software code, user interface design or logos.

 

ALL CONTENT ON planretire.com IS SUBJECT TO APPLICABLE STATUTES AND REGULATIONS, FURNISHED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

 

An investment adviser or IA rep may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if they are excluded or exempted from the state's investment adviser or IA rep requirements, as the case may be. Follow-up or individualized responses to consumers in a particular state by an investment adviser or IA rep that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's investment adviser or IA rep requirements, or pursuant to an applicable state exemption or exclusion.

 

For information concerning the licensure status or disciplinary history of an investment adviser or IA rep,

a consumer should contact his or her stated securities law administrator.

© Copyright 2019 GW Financial, Inc. All rights reserved.

Privacy Policy