Muyuka Sons And Daughters of America

Unity – Solidarity – Progress

We all have Life Insurance – But is it Adequate?

Posted by musada on November 1, 2008

We all need peace of mind. We need peace of mind because we worry. We worry about what will happen if we should loose our income. What will happen if we should become sick and cannot earn enough money to pay our bills. We worry about our loved ones – how they will survive without our pay check. We worry about if we should die will there be enough money to give us a befitting burial. We worry about how we shall live when we attain retirement age and can no longer work.

Many of us try to overcome these worries in different ways. Many of us work hard and save money in case of any of the above incidents occurring. Others try to invest in business or other money markets in order to increase our wealth for the rainy day. In meeting houses, there is the trouble bank contribution which is made in order to assist members in case of illness, death of loved ones and death of the member.

We have many options. Some of us buy life insurance. Some of us want the insurance but do not want to pay for a good insurance. Good insurance like any commodity cost according to their quality. Insurance is varied. Insurance can be classified into the following:

Term Insurance

This is insurance that is taken for a specific period – 1 year, 5 years, 10 years up to years. This insurance gives you coverage only for that period. After that your insurance terminates and if you want coverage you have to start another contract. This is good if you do not have money and want to have a large coverage. This is the cheapest insurance in the market.

Term Insurance With ROP

This is insurance is like the first insurance but with the rider that all the money you spent on the insurance as premiums will be returned to you. This insurance cost a little bit more than the above.

Whole Life

Whole life gives you coverage for up to age 100years. This is has an additional benefit that cash value is built. That is part of your premium is used to generate cash that you can access as a loan. You have to pay back this loan or it may make your policy lapse. If you do not pay the loan, when you die, your family will be given the death benefit minus the loan you took from the policy.

As an illustration If you took a policy for $100,000.00 death benefit. If the policy produces a cash value of $20,000.00 and you borrowed $10,000.00 out of the cash value. Let us say you were given an interest rate of 8% on the money you borrowed. If you do not pay and die at the after keeping the money for one year, your family will get $100,000.00 – $10,000.00 – $800 = $89,200.00

The bottom line is that the cash value does not belong to you.

UNIVERSAL INDEX LIFE

This is like the whole life with the difference that the cash value belongs to you. You can take it as a loan or plain withdraw it. If we used the above example, and you die. Your family will receive the death benefit, plus the balance of the cash value less the interest you were expected to pay.

$100,000.00 + 10,000.00 -$10,000.00 – $800 = 109,200.

All insurance are a combination of the above with riders. Riders are additional benefits included in the policy to meet the needs of individuals.

The cost of insurance is determined by your health, age and the value of the death benefit. Before buying insurance you should carefully examine why you want insurance. What are the needs you wish to take care of.

Are you adequately insured?

Edward Mokam,

Life insurance Producer

Tel 301 592 7112

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One Response to “We all have Life Insurance – But is it Adequate?”

  1. […] Some of us buy life insurance . Some of us want the insurance but do not want to pay for a good insurance . Good insurance like any commodity cost according to their qualityWe all have Life Insurance – But is it Adequate? « Muyuka Sons And … […]

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