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Mississippi Life Insurance Some people equate life insurance with tragedy and death. In truth, life insurance is for the living. Without it, the sudden demise of a key breadwinner could leave a family stranded without the resources to maintain their lifestyle - or even retain their home. Not so long ago, experts recommended that families carry a life insurance policy with a death benefit of between five and seven times their annual household income. Today, however, in light of rising house prices in many parts of the country and spiraling college costs, most advisors now recommend eight to 10 times income. Unfortunately, most American families are underinsured. According to statistics from industry research and consulting firm LIMRA International, the average American household carries just $126,000 in life insurance - approximately $300,000 less than they actually need - and only 61% of adult Americans have life insurance protection, a decline from 70% in 1984. Financial experts generally consider life insurance to be a cornerstone of sound financial planning, for two key reasons. First, it can be a cost-effective way to provide for your loved ones after you are gone. And second, life insurance can be an important tool in the following ways: 1. Income replacement -- For most people, their most valuable economic asset is their ability to earn a living. If you have dependents, then you need to consider what would happen to them if they could no longer rely on your income. A life insurance policy can also help supplement retirement income, which can be especially useful if the benefits of your surviving spouse or domestic partner will be reduced after your death. 2. Pay outstanding debts and long-term obligations - Without life insurance, your loved ones must shoulder burial costs, credit card debts, and medical expenses not covered by health insurance using out-of-pocket funds. The policy's death benefit might also be used to pay off a mortgage, supplement retirement savings, or fund college tuition. 3. Estate planning -- The proceeds of a life insurance policy can be earmarked to pay estate taxes so that your heirs will not have to liquidate other assets to do so. 4. Charitable contributions -- If you have a favorite charity, you can designate some or all of the proceeds from your life insurance to go to this organization. Determining how much Mississippi life insurance coverage you need is a four-step process: Step 1: Determine Your Family's Short-Term Needs Short-term needs are financial obligations and/or expenses arising within six months of death. Examples of short-term needs include expenses you pay now such as: Loan balances (automobile loans, etc) Outstanding credit balances (credit cards, revolving lines of credit, etc) Mortgages (first and second mortgage, home-equity loans, lines of credit) Add to these current expenses any death-related expenses that must be paid in the short term: Funeral expenses Final medical costs Estate settlement costs and probate Estate taxes due Charitable bequests you would like to make upon your death If you don't already have one, your survivors should be left with a liquid emergency fund sufficient to get them through any unexpected financial needs. Most advisors recommend between three and six months' worth of living expenses. Step 2: Determine Long-Term Needs In addition to covering your survivors' short term needs, some level of monthly income will be needed to maintain their current standard of living and meet financial goals such as saving for retirement and funding college for children. The value of these future obligations is discounted back to present value amounts to provide a dollar amount that, if invested, could provide an adequate income stream to fund all of your long-term goals. Step 3: Calculate Your Total Available Resources By this point, you should have a good idea of your family's total cash needs in the event of your untimely death. With any luck, you have already begun to set money aside to cover some of these costs. Other resources that may be available to your family include pensions, annuities, funds from retirement accounts, employer-provided life insurance, and Social Security. The Social Security program offers benefits to survivors under age 17, and those whose spouses were receiving retirement income from Social Security can also count on survivorship benefits. The total value of these future resources is discounted back to present value amounts. This gives us a single dollar amount that we can use to offset your total needs. Step 4: Provide Funds To Cover A Shortfall In most cases, comparing total needs to total resources will result in a shortfall. That's where life insurance comes in. Without it, your survivors will be left with the choice of either finding or creating additional resources (such as having the surviving spouse return to work) or experience a decline in the quality of their lifestyle. Life insurance is uniquely suited for covering such a shortfall. It is a means of sharing the financial risk of premature death with many, many others who have similar concerns. You pay a relatively small premium to an insurance company in exchange for their promise to pay your beneficiaries a specified death benefit in the event of your death. You may find it ironic that a financial need arising from death can be alleviated by a financial resource that is created after death. That's why life insurance, although something no one hopes to ever need, is indeed for the living. It's also a vital issue we can help you investigate in greater detail to ensure your family's financial future will be protected. Statistics show the need for greater awareness of life insurance and its benefits: Three in 10 adult Americans have no life insurance at all. Insured Americans, on average, have only four times their annual income in life insurance coverage. Many insurance experts believe that people's true need for coverage is 10 times their gross annual income, and sometimes more. Only 41 percent of adult Americans have individual life insurance. Many rely on insurance provided by their employers, leaving many employees without coverage if they were to lose their job or change jobs. Each year, a significant number of Americans (550,000) die prematurely. In fact, the chances a 25-year-old male will die before reaching the retirement age of 65 is nearly 1 in 5; for a female, the odds are 1 in 9. When a premature death occurs, insufficient life insurance coverage on the part of the insured results in 75 percent of surviving family members having to take measures to meet financial obligations, such as work additional jobs or longer hours, borrow money, withdraw money from savings and investment accounts, and, in too many cases, move to smaller, less expensive housing. (The preceding information was obtained from National Association of Insurance & Financial Advisors) Types of Mississippi Life Insurance Level Premium Term Life Insurance Level premium term policy provides the convenience of having a constant level of affordable life insurance coverage for the set of the duration of the policy. It's a simple plan and keeps you insured for the period of time you purchase. Depending on your age, you may purchase 10, 15, 20, 25 or 30 year level premium term policies. Issue age 0-70. Once the initial policy expires you have the option to renew the policy. During the renewability phase of the policy your rates will be based on your age and health at time of renewal. You may also convert the policy to one of our Universal life insurance policies before age 65. Return of Premium Term If you are looking for a policy that combines good life insurance protection the opportunity of getting your cash back, Return of Premium (ROP) term life insurance may be right for you. Available as a 20-year level term plan, this option is ideal for individuals who want and need protection and peace of mind but think they will outlive their policy. With our ROP Term, if you are living and the policy is in force at the end of the 20-year period, all your base premiums and policy fees are returned to you. If you cancel before the term expires, you could still receive a percentage of the premium you have paid. Ordinary Life Need coverage for final expenses or burial cost? Our Ordinary Life insurance policy helps pay those costs. Face amounts available up to $10,000. Issue ages: 15-80 Universal Life Want your cash accumulation value to earn interest and give you even greater flexibility? Then, choose Universal Life. Subject to policy provisions, you can increase or decrease your death benefit, vary your premiums and temporarily suspend your premium payment. Optional Benefits When it comes to your life, we can help you prepare for the unexpected. In addition to our policy choices, you can add these optional benefits to most plans to tailor them to your family's needs - for a low cost. Waiver of Premium Benefit (WP) provides for payment of all premiums becoming due during the total disability of the insured. Policy benefits and values will not be reduced as a result of any premium waived. Waiver of Monthly Deduction (WMD) Benefit provides for the waiver of all "monthly deductions" becoming due after six consecutive months of total disability and during the total disability of the insured. Accidental Death Benefit (ADB) provides for the payment of a specified amount in addition to the sum insured, upon death of the insured resulting from accidental bodily injury, provided death occurs within 90 days from the date of the accident. Children's Term Rider (CTR) Level term insurance on each insured child until the policy anniversary nearest the child's 25th birthday or rider expiry. Guaranteed Renewability Benefit is available only on Level Premium Term and Return of Premium plans. This benefit must be added at time of issue cannot be added to existing policies. This benefit provides for the renewal of the Level Premium Term or Return of Premium policy for the same number of years as the original policy, regardless of health conditions, at the time the original term period. Example: A 10 Year Level Premium Term policy can be renewed for another 10-year period at the end of the first 10 years. A 20 year Return o Premium policy can be renewed at the end of the 20 years. The premium at time of renewal for the new Level Premium Term or Return of Premium policy will be at the insured's attained age. What is the best Mississippi life insurance policy to have? The best life insurance policy to have is the one you can afford and is in force when you die! Avoid any agent that tells you his one type of life insurance policy is the best for all situations! There is no such thing! Each persons needs are different and should consult with an agent to figure out which policy best suits their needs. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice. Past performance is no guarantee of future results. Diversification does not ensure against loss. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice to your situation. Please call us today at (601) 825-9995 for a a free quote personalized needs assessment.
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