While it is not necessarily a popular topic, understanding some life insurance basics is essential.  This is because there are many uses of life insurance throughout our lifetimes. Fortunately, there is a type of insurance that matches various needs.

For example, insurance may be needed for:

  • Liquidity at death to pay bills, pay taxes, replace lost income
  • Liquidity at death to complete business agreements such as a buy-sell agreement in a succession plan
  • Liquidity at death to equalize an inheritance
  • Liquidity during life to pay for long term needs or chronic illness

Once the need for the insurance is clear, then it is important to determine which type policy offers the necessary features/benefits:

  • Is a single life policy best or is it a survivorship policy (policy based on two lives)?
  • Is there a measurable term of years for the insurance need?
  • Is it better to have a fixed death benefit or an increasing one?
  • Does it need a rider to protect against disability, chronic illness or long-term care?
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