Michaels Brothers Insurance
Michaels Brothers Insurance

Life Insurance

How should I go about choosing life insurance? The two questions we need to ask ourselves about life insurance are: how much and what kind. There are two basic approaches to determining how much insurance we should own; Capitol Needs Analysis and Human Life Value. Human Life Value seeks to project our lifetime earnings and to insure some percentage of that amount, for example ten times your annual income. Capital Needs Analysis measures the present value of future needs against the present value of future financial resources and seeks to insure the difference if there is a short-fall.  What kind of insurance you should own depends on many financial planning factors. However, the length of the need and the cost will usually point the way.

There are basically two types of life insurance policies: Term Life and Permanent Life. Term Life pays if death occurs within the policy period, for example 20 years. Term Life is usually suited for shorter range needs. Permanent Life pays no matter when death occurs assuming all the premiums have been paid. Permeant Life usually has a higher premium than Term Life but it usually develops a cash-value. Permanent Life is usually best for long-range needs. Now from this simple beginning things can really get complicated. There are all sorts of term and permanent insurance policies. It takes experience and knowledge to know what’s best in each situation.

We also consult on the following life insurance policies:

  • Permanent life insurance, including:
  • Whole life, universal life, limited pay, and endowment
  • Term Life Insurance
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