Tips for life insurance buyers that describe some of the fundamentals for choosing an agent and deciding between term life and whole life insurance.

1. Life Insurance
Buying Tips
DOUG HERING, LICENSED AGENT
DHERING@YOURSUMMIT.COM
WWW.YOURSUMMIT.COM

2. Did you know?
 Most Americans are either uninsured or underinsured
 This leaves many families at risk
 Reasons people do not buy or do not buy enough life insurance
 They think they can’t afford it
 They don’t like high pressure life insurance sales people
 They don’t understand life insurance well enough to purchase it through
the internet

3. Buying Tip #1 – Buy term and invest
the difference isn’t always right
 As with so many financial decisions, once size fits all rarely applies.
 The fact that a concept is simple doesn’t make it better.
 Whole life can be just as simple
 Depending on where else you would put your money, a properly
structured whole life policy can be very simple and have a good return.
 An agent who understands whole life insurance, especially as a way to
provide your own bank/line of credit will know how to make the policy
work better for YOU.
 Simple is not a good enough reason to choose any investment or
use of your money.

4. Tip #2 – Consider a combination of
whole life and term life
 Whole life is especially good as a savings account for most of your large
purchases
 Cars
 Down payments
 Big vacations
 Whole life doesn’t always provide as much insurance coverage as
some people need.
 Term insurance provides just insurance with no savings, but it’s cheap
 Term can be used to provide the insurance that your whole life can’t
 A combination allows
 Savings
 Layering of policies to provide the most coverage for the most important
periods of your life

5. Tip #3 – Consider your risk tolerance
 Life insurance can cover your loved ones in a number of situations
 Many people think only of their normal death or accidental deaths
for normal families
 Consider
 Might a child or spouse need coverage later in life due to their inability
to care for themselves?
 What kind of legacy do you want to leave?
 What if your investments do not grow as you plan for?
 What risks are you willing to take? Will you need a ten, twenty or
even thirty year term policy? Will you need life long insurance?
 For example, a term policy will not cover you in your later years

6. Tip #4 – Never buy from a pushy
agent
 Make sure you know what you are buying
 Make sure the agent has your best interests at heart
 Make sure what you are buying fits into your overall financial life
goals
 Make sure what you are buying fits your risk tolerance

7. Tip #5 – Buy from an agent that
understands both whole and term
life insurance
 Many agents stress one or the other
 Buy term and invest the difference agents will give many unfounded
reasons to not purchase whole life insurance
 Example: When you die you lose your cash value in whole life
insurance.
 FACT: the truth is that the insurance portion of a whole life insurance contract
decreases over time. This is the nature of a whole life policy. Make sure your
agent can explain this to you.
 Many whole life agents will either ignore the benefits of term life
insurance or try to get you to buy all whole life just because they will
make more money

8. General Information
 Whole life insurance is best for:
 People who want to save for purchases and use the cash value to
invest or purchase large items
 People who have family members who will need the benefits through
out their lives
 People who are more conservative in their saving strategies
 People who have high incomes and want to shelter money from
taxation
 Term life is best for:
 People who simply want a life insurance policy in case they die during
their primary earning years

9. Downsides of Whole Life Insurance
 It takes more understanding
 There is a larger up front commitment
 Some policies do not have reasonable dividend payouts
 It is difficult for many to purchase as much insurance as they need
during their primary earning years

10. Downsides of Term Life Insurance
 It often ends just when you need it
 It does not cover the risk that your investments fail to meet your
plans
 It does not cover the risk that a family member becomes disabled or
for other reasons need the life benefit after a specified term
 You may not be able to get additional insurance later in life. You
may develop health issues that cause you to become uninsurable

11. If you need help,
contact me.
DHERING@YOURSUMMIT.COM