As we get to the new year, you start to look at your finances and updates to your insurance. Today, we will specifically talk about Life Insurance and financial expert Clyde Anderson stops by the Get Up Church to help you out. How can you find your legacy with life insurance? What about living something for your family to pay expenses or keep their quality of life the same after your passing?
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ERICA CAMPBELL: For some, this may be uncomfortable to talk about. But let’s talk about it today. Who should have life insurance? And why is it so important?
CLYDE ANDERSON: Well, I think you really have to think about it. It’s important because Who are you leaving behind and do you want your family’s lifestyle to change? And that’s really you have to you have to have yourself that question. If you die will your family’s quality of life change? Will they need to move? Change schools? Be able to go to college? You know, what would happen if you’re gone? And so I think that’s the question we have to ask ourselves.
ERICA: You say that it’s important to determine if you are insurable. What does that mean?
CLYDE: Yeah, I think the younger you start, the less expensive it is. Because they’re going to look at factors like your family, medical history, life expectancy, risk factors. And those things, of course, you know, almost anybody can be insured but the greater the risk, the greater the cost of the premium. You’re gonna pay more the later you wait to get the insurance. So that’s always great to start early.
ERICA: There are different types of life insurance, how can people determine what type of life insurance they need?
CLYDE: We hear thrown around a lot. And there are a couple different types, we need to know about: It’s term or whole life. Term means it’s for terms, we’ll say it’s for 10 years, you may want to have coverage for that 10-year period. if you believe something could potentially happen in that time, but whole life is the one that’s going to cover you for the rest of your life. So from the time you get the insurance policy, it’s going to cover you for the whole life. But there’s also benefits that come with that. So it’s key to know and understand it.
ERICA: Can you use your insurance money while you’re alive? Because I know there are some plans where the funds are actually usable.
CLYDE: Well, you know, that’s a great question. They really, what I say is, you really have to think about this, you can really create your legacy plan. Using insurance, it’s really about leaving an inheritance instead of a mess. You know, and we’ve seen it often, we got to have the GoFundMe accounts for people when they pass away, because we haven’t, you know, in China, they plan 100 years ahead sometimes. And when we’re not doing it’s planning for our own lives and our destinies. And so we got to take control of that. And I think 60% of Americans don’t have life insurance coverage right now. And it’s essential. And when I say a plan because you can use it like you were alluding to, you can use it if you have a whole policy, you can use it to buy things like a car down payment on a home, you can pull from that, and you can even use it in your retirement. So that’s why I say it could be potentially a wealth strategy, and it could be tax-free as well. So you want to look at that and get with a tax expert to really understand.