We’ll cut to the point, and save you some scrolling: the answer, of course, is “Yes.”

But why that answer is yes is a bit more complicated. And worthy of some investigation.

After all, when gas prices, grocery prices and the cost of just about everything seems to be going up, why in our right minds would be adding a monthly premium on top of that? Why not wait?

Let’s take a look at the reasoning, here, and you can write us a strongly worded letter if you disagree.

What is a recession? A recession is defined as a significant decline in economic activity that lasts for months or sometimes even years. Depending on your age, you’ve likely witnessed several of them in your lifetime already. On the flip side, you’ve also been around during periods of economic expansion, which occur when the economy grows for two or more consecutive quarters.

Great. So now we’re on the same page about what is or isn’t a recession. (Since it seems that even the experts and the politicians tend to disagree.) And as scary as a recession may sound, they’re ultimately considered an unavoidable part of the business cycle. The economy expands and retracts. It is a regular cadence that occurs in economies all around the world, due to national and international market performance.

Obviously we tend to notice it more when the economy takes a downturn. And we really notice it when our household budget is pushed to the limit, due to no fault of our own.

When cutting costs during a recession, don’t cut your life insurance.

The grocery bill has gone up 20%. Would you, in response, cancel your car insurance?

No, of course you wouldn’t. Because you know, deep down, that by removing an economic safety net in a moment of economic uncertainty is a bad move.

Would it help balance this month’s budget? Perhaps. But what happens if you get in a fender bender? Wouldn’t that be so much worse than having to somehow pay the insurance premium?

A temporary economic downturn is the worst possible time to discontinue protecting the ones you love. If the unexpected were to happen, would they be able to afford to maintain their current lifestyle without the assistance of your life insurance policy? Would they be able to bear the financial burden of your final arrangements amid increasing costs and fees?

In a moment where peace of mind is hard fought for, is sacrificing it really a smart choice?

Let’s face it—it’s easy to spend $100 or more each month stopping by the drive-thru for coffee or fast food. (We hate it, too! But cuts must be made.)

Maybe you never considered life insurance because you think it comes with a high price tag. Most people believe it will cost 2 to 3 times more than it really does when, in fact, life insurance is actually pretty affordable.

Fun fact #1. According to the 2022 Insurance Barometer Study, 80% of people overestimate the cost of life insurance. Don’t let this common misconception keep you from getting the coverage you need. 

Paying a premium for peace of mind.

Life insurance is about knowing that your loved ones will be provided for if something happens to you. How does it feel having the confidence that no matter what happens to you, those who mean the most will have financial security? These kinds of considerations are the most important ones to keep in mind. They allow you to sleep peacefully at night, knowing full well that you’ve done everything you can to help ensure the quality of life for those you love.

Term insurance versus permanent insurance.

If there’s one thing that the past few years have taught us, it’s to expect the unexpected. With that in mind, now is a perfect time to consider a life insurance purchase if you don’t yet have coverage.  

Your life insurance options depend on both your budget and your needs. If you’re only looking to cover your final expenses, your cost would likely be lower because your needs are different than those of someone who needs to make provisions for their spouse’s and children’s futures. 

Various insurance carriers offer many different types of life insurance products to choose from, but most life insurance can be defined as either term or permanent.

Term life insurance protects you for a specific period of time. If you pass away during that time, your spouse or other beneficiary will receive a specified amount of money as a death benefit.

Permanent life insurance has no specified term since it is designed to cover you for the rest of your life. Though typically more expensive, permanent life insurance has affordable options that not only provide a death benefit but can also provide cash value, unlike term life insurance.

Last, but not least.

It’s understandable that rising prices can make you take a second look at your expenses. But here’s a tip for anyone looking maintain a more consistent budget.

Look into something called “level-premium insurance”:

Level-premium insurance is a type of term or permanent life insurance where the premium remains the same over the entire life of the policy. If you want to lock in a rate for the length of your contract, this type of policy is worth your consideration. With this type of coverage, premiums will never go up. They are guaranteed to remain the same throughout the length of your contract.

Sounds pretty dang good, doesn’t it?

The thing is: this is just one of many life insurance options available. An agent can help you find the policy that’s the best fit for you, and maybe even talk about types of policies that you’ve never even heard of. That’s why it’s always best to talk to an expert, in these types of situations.

To speak with an insurance professional, head over to our contact page, or fill out the form below:

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Let’s be honest. A million dollar anything sounds like a pretty big deal, doesn’t it?

However, when it comes to life insurance, a one-million-dollar life insurance policy could actually be the bare minimum of what you need to protect your family. Or, it could be, once you crunch the numbers, you find that it’s entirely too much.

Regardless, let’s take a quick look at what a million-dollar life insurance policy really means.

Fun Fact #1. Think you need to be a millionaire to have a million dollar life insurance policy? A typical monthly premium for a million dollar life insurance policy starts at $30 a month.

A definition of terms.

First, let’s start with a few basics. Life insurance is a financial protection you provide to your loved ones if you die. Depending on your family’s stage of life, you may need more or less coverage.

Take, for example, newlyweds in their early twenties with a baby on the way, and then compare them to a retired couple with grown kids and sizable savings. If a spouse dies in either of these scenarios, the financial outcomes could be very different. The young couple may not have as much saved in the bank to cover their living expenses compared to the older couple.

In this example, the one-million-dollar death benefit might be more than enough for the retired couple. However, the newlyweds may see a need for a larger death benefit as they assess their obligations as a young and growing household.

Make sense? We thought so.

What life insurance ought to cover.

Common considerations to factor into your decision include mortgage payments, car payments, student loans, personal loans, credit cards and other debts. You should also consider everyday living expenses and future costs (like college tuition for the kids and retirement costs).

Depending on your circumstances, suddenly that big $1 million number can start shrinking.

Although $1 million seems like a nice, round amount when applying for a life insurance policy, it makes sense to take a more strategic path. Using a calculator to help you decide how much life insurance is appropriate for your situation will give you a better picture of how much money you need to support your loved ones if you die.

How much you pay per month for a million-dollar policy.

Typically, the premium for a million-dollar term policy starts at around $30+ a month and then goes up from there based on your age and health status.

Here are a few of the factors that affect the cost of the policy:

• Age
• Lifestyle factors (i.e., skydiving or smoking)
• Health
• Gender (women tend to live longer than men)
• Policy type (Term vs. Permanent)

Obviously this is very loose and unspecific, and the only way to know for sure what you might be paying per month is to talk to a qualified agent. You can also get started beforehand by using our Life Insurance Needs Calculator.

Fun Fact #2. The agents at the Hanna Agency have one objective, and that is to educate you about your insurance options. They are not trying to sell you anything — but they can certainly move that process forward, if that is what you would like.

A term million-dollar policy vs. a permanent million-dollar policy.

Let’s talk about the difference between “term” insurance and “permanent” insurance, from the perspective of someone who is purchasing a million-dollar life insurance policy.

A one-million-dollar permanent life insurance policy will be significantly more expensive than a term policy with the same face value.

Why is term insurance cheaper? It’s because term insurance policies have no accrued cash value and end after a certain amount of time (the “term”).

So, for example, let’s say you purchase a 20-year term policy for $1 million. (Nice!) You pay your monthly premiums for 20 years. At the end of the 20 year term, your policy would end. There would be no value attached to it after that. As mentioned before, perhaps you paid $30-$40 a month or so for that policy.

On the other hand, you may pay hundreds a month for a one-million-dollar permanent policy. But that policy will be, as the name suggests, permanent. If you keep it long enough, it will also accrue cash value that can be accessed — if needed.

Great. So now maybe your gears are turning a bit, and you’re leaning towards purchasing a million-dollar life insurance policy.

The next question you’d probably have is, “What’s the process for getting a policy?”

The insurance company offers you a life insurance policy only if you are considered a reasonable risk for them. The way the insurance company determines this is through a process called underwriting. They’ll ask you health questions, do a medical exam and/or obtain medical records from third-party sources.

A million-dollar policy will require a medical examination.

Some insurance companies advertise “no medical exam needed” for their insurance plans. However, these are typically for policies with a lower face value than a million dollars.

Express policies with no exams can sometimes go up to $300,000, but any higher, and you’re looking at more scrutiny to get underwritten. Perhaps you may even be able to find a company or two that offers up to $1 million with no medical exam. But even with these, there is a good chance that you won’t get through the whole process without a follow-up exam.

Knowing what a million-dollar life insurance policy means in today’s market and in today’s dollars is an important benchmark to understand. It’s a good starting point for making your own decisions on life insurance. Then, your next step should be to dive deeper into your own needs and find the insurance product that is right for you.  

Finally, if you are looking for help in this process, we recommend speaking with an independent insurance agent. As a licensed professional, an agent can help you compare products and insurance companies so you can find the best solution for your situation.

The Answer to the Big Question.

What does a million dollar life insurance policy get you? Well, beyond a million dollars, it also gets you something intangible. Owning a life insurance policy with a “million-dollar payout” can give you a sense of comfort and stability in a world that can sometimes feel unstable and unpredictable. (Plus you get to walk around and tell people you have a “million-dollar life insurance policy.” Kind of cool.)

But don’t take our word for it. This site is full of Real Life Examples of people who have gone through the worst case scenarios, and come out of them singing the praises of Life Insurance.

So what do you think? Is it worth it? Do you see yourself as someone who owns a million-dollar life insurance policy? If not, why not?

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When you’re a small business owner, you kind of have to think of everything, don’t you?

Of course, the fun things to think about are all the things that can go right. If and when your business takes off – and why wouldn’t it? – you’ll be your own boss! There’s no limit to the amount of money you could make. And, because you are your own boss, you get to set your own hours. And be responsible for the company culture. And hire people that you like and respect. Not to mention the work itself, which has the potential to be fulfilling and expansive and the culmination of your childhood hopes and dreams.

(That’s the top of the mountain, isn’t it?)

But as a small business owner, you also have to think of every thing that can go wrong.

We probably don’t have to go into much detail, here. You know full well what things can go wrong at your small business. Angry customers, supply chain issues, tech problems – there’s no limit to how things can go sideways when it’s your business, your ultimate responsibility.

Which is what brings us to life insurance.

After all, your job – as the owner – is to be prepared for every thing that can and could go wrong, isn’t it? What could go more wrong than your untimely death?

Fortunately, life insurance is built to be prepared for these scenarios. Whatever plan you put in place should be able to deal with even the most fringe of fringe cases. But none of that matters if you haven’t purchased it in the first place.

So let’s talk about it a bit more in-depth, shall we?

You are the “key person.”

The “key person” at a business is most often the business owner. It makes logical sense, doesn’t it? The owner, you, are the person who keeps most of the day-to-day minutiae of the business in your head. If tomorrow morning, we – your loyal employees, or customers – were to somehow find ourselves without you – what would we do?

That’s why “key person insurance” exists. It specifically is built to function as insurance against the worst-case scenario for any small business: the untimely loss of the person who matters most. You.

Key Person Insurance is a life insurance policy that pays out when a key owner/employee dies. The business itself purchases the policy and all the proceeds from the death benefit are also paid directly to the business. The main benefit of Key Person Insurance is that the cash the policy provides can be a bridge to the next necessary step in the business’ life—whether that is finding a key person replacement, selling the business or moving on to other projects.

Make sense? We thought so.

Keep that term in your head. Write it down if you have to. And let’s move on to the next thing you might want to deal with: buy-sell agreements.

An agreement to buy out your share of the business.

A fair number of you reading this may be saying, “Wait a second, I’m not the sole proprietor of my small business. I’m in a partnership!”

For those of us who operate in a partnership, we have something called a “buy-sell agreement.”

Buy-Sell Agreement. In the case that your business has more than one owner, then a Buy/Sell Agreement is another option to mitigate the risk of death of a key partner. Entrepreneurs can use life insurance to fund a Buy/Sell agreement. The cash benefit then allows the other owners to buy out the deceased partner’s interest from their remaining family members.

Ask yourself this: if you were to die today, would your family want to continue running your business?

The answer, most of the time, is a resounding “no.” That’s why a buy-sell agreement is so profound, and so powerful. It creates a framework to make it easy for the surviving partners of a business to buy out their deceased partner’s share of the business.

Convinced? We thought you’d be. It’s just common sense.

Let’s jump ahead to the next part: buying the insurance you need.

Lastly, let’s get insured.

According to the Small Business Administration (SBA), over 99% of America’s firms are small businesses. What does that mean? It means you are not alone. In fact, in the insurance business, we’re well versed in dealing with people who are in situations like your own.

Lastly, just so you have the full scope of options available to you, let’s take a look at the most simple one, which is simply buying (or expanding your existing) individual life insurance:

Individual Life Insurance. Covers your debts and responsibilities. If you die, your family would have financial relief from a cash benefit that could help close down or sell off your business if they don’t want to continue your work.

Sounds good, right? It doesn’t matter if you’re a freelancer, influencer or business owner, you owe it to yourself to protect everything you are working so hard to create. (Don’t try to fight it!)

We put our handy-dandy contact form below. Tell us your situation. We’ll look at what policies are a fit for your unique situation and report back as soon as possible.

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Here’s a startling statistic: at least 20 million individuals in the Black community are without adequate life insurance coverage.*

One of our goals at The Hanna Agency is to change that.

Why? Well, we believe that having life insurance is fundamentally important not just for the numerous benefits that it grants when a loved one dies, but also because it can be used as a tool to create something called “multi-generational wealth.”

Using best practices to create multi-generational wealth can have a profound affect on the life of an individual, the culture of a family, and a livelihood of a community. Anything that can be done to allow for people to live out their hopes and dreams is worth the time and energy it takes to become educated.

So let’s take a look at the process of creating multi-generational wealth by first defining what, exactly, multi-generational wealth is.

What is multi-generational wealth?

Patrick Hicks at TrustandWill.com defines it as this:

“Generational wealth is wealth that is passed down from one generation to the next. It begins when one member of a family accumulates enough wealth in their lifetime to pass down to their children, usually through a Trust or a Will. In turn, these children may leverage this wealth to create additional wealth and pass it on to their own children, and so on and so forth. Passing on wealth for more than one generation is considered multigenerational.”

Great. So now, knowing what it is, how can we utilize something like life insurance to create multi-generational wealth?

Well, for starters…

The proceeds from your life insurance are typically tax-free.

This is, of course, huge.

Most people who receive the money from a life insurance policy don’t have to pay taxes on it, as the proceeds generally are not counted in calculating gross income. (Any interest the policy receives, however, would be subject to taxation.)

Why is this important? Well, taxes are… a lot. And so the inheritance of these funds in manner that removes taxes could help catapult your family to a different economic status.

A life insurance policy can ensure your child’s education.

Let’s say, God forbid, that you were to die prematurely while your children are still young.

We know what life insurance does in this scenario. We know that ongoing living expenses are taken care of. We know that funeral expenses are typically covered.

But, perhaps more profoundly, it can also keep the dream of a college education for your kids alive. Many parents opt for a term life insurance policy during these years, as it is an affordable way to get a large amount of coverage. And typically, that larger need ends when the children graduate.

A lesser-known benefit of permanent life insurance is that it can also help with college costs while you are alive. In addition to the death benefit, it also accumulates something called “cash value” over time. You can tap that money in the future for whatever you want, such as to help with college costs. (Just keep in mind that the death benefit would be reduced by the amount you tapped that you don’t repay.)

How does this add to multi-generational wealth? Simply put, statistically speaking, people who are college-educated tend to earn more over their lives. So, by ensuring that your child goes to college, you can preserve, or even add to, the wealth that is distributed over generations.

The likelihood that your child’s child goes to college increase, as well.

Let’s take at another way that the “cash value” of your policy can help you in your journey towards creating multi-generational wealth.

You can now weather a financial emergency with “cash value.”

In the event of an emergency—which could range from medical bills to helping your small business stay afloat financially—you can take out a loan against your permanent policy.

While you’d be charged interest, it’s usually lower than what’s charged by other lenders. And access is much easier than getting a traditional loan since the money is already there in your policy acting as collateral.

This helps create multi-generational wealth in the way you’re already imagining. One of the main reasons that wealth is diminished, and not passed on to descendants, is because it is spent on things like exorbitant medical bills or businesses that can’t weather an economic downturn.

Did you think that life insurance could help you in this way? We bet you didn’t.

You could use something called “accelerated death benefits” to provide for you and your family before you pass.

Terminal illnesses can take a huge toll on family finances. As we said in our previous point, medical bills are one of the leading causes of financial ruin. If you click that link to the Forbes article, you’ll see that more than 50 percent of Americans struggle to repay medical debt.

If you were faced with a terminal illness, and you have a life insurance policy that has an “accelerated death benefit”, you could feasibly access the money in the policy while you’re living. What for? Well, the obvious thing would be to pay medical bills or for the cost of your care while you’re still alive.

You could even use the “accelerated death benefit” to take a dream vacation with your family. Any amount left over would still go to your chosen beneficiaries after you die.

So what are you waiting for…?

We know it isn’t the most fun way to spend your day. And we know that talking about one’s own death can bring up all sorts of emotional baggage that you might not want to sort through.

However, we hope that we have made a compelling point here. Wealth that you have generated can grow in the years to come. In fact, it can grow exponentially. And that wealth can be used to help your family and your descendents live out wildly fulfilling lives.

Think about how you want them to remember you. Is it as someone who died, leaving a series of annoying and energy-intensive action items? Or do you want them to remember you as someone who thought ahead, and left your family in a better spot than they ever were when you were alive.

It’s simple: when you purchase a life insurance policy for your family, it is a straightforward and affordable way to help build wealth and put your loved ones ahead of the curve.

Ready to get started? Calculate an estimate of how much coverage you need by using our Life Insurance Needs Calculator.

*According to the 2021 Insurance Barometer Study conducted by LIMRA and Life Happens.

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We know what you’re thinking: “This is too soon!”

That’s a totally reasonable response. But we believe you’re here because you know, in your heart, that no one truly knows what the future holds.

What we do know is that, in our business, most people do not prepare for the logistics of their own deaths before it is too late.

We don’t blame them, of course. No one wants to think about the inevitable.

But we’d like to ask you these questions:

• Would your family know what bills were due and where to pay them?

• Would your spouse know where to find your life insurance policy?
  
• Would your spouse know where to find your car title?

Did you answer “Yes?” “No?” Or “I don’t know?”

Planning for what happens after you pass away isn’t for you. It’s for the people you love. It’s an act of love that you can make now – today – that will be felt, and appreciated years, decades perhaps, down the line. You could plant the seed today, if you took a moment to do so.

Think of it this way: do you really want to burden your family with financial, legal and logistical problems while they’re grieving your loss?

We didn’t think so.

So here are ten steps you can take – today – that will help your family immensely.

Have life insurance. Most people have this through their job. If not, having life insurance coverage can help your family continue to thrive even if you’re not there. Knowing how much to purchase can be complicated, so it’s important to seek assistance from an insurance professional.

Have an updated will that is clearly labeled. This is a plan that is executed by those who survive you. It designates some essential roles: executors, guardians and trustees. Your executor’s first task is to locate your will. To facilitate that, place the original in an envelope with your name and “Will” written on it. Then keep the envelope in a fireproof metal box, file cabinet or home safe. Tell someone important – today – that this will exists and where it is. Try trustandwill.com.

Have a health care directive – aka a “living will.” A living will is a medical directive written in advance that tells us how to direct care, should you become unable to do so. (This happens more often than you think.) It can include when to initiate the directive and who has the decision-making responsibility to withdraw or withhold treatment. Same as above. Trustandwill.com is very straightforward and user-friendly.

Specify your final arrangements, such as burial or cremation, where you want to be buried, whether or not you want to be an organ donor, etc.

Have a list of professionals who assist you with your family’s legal and financial affairs (insurance professional, attorney, accountant, etc.). Remember that this list is meaningless unless your survivors know that it exists, and where it might be.

Designate powers of attorney. This is usually part of number three, above. This person will have broad authority over your financial affairs, should you not be able to handle them yourself. This person should be your spouse, a close friend or a relative.

Explain to heirs how your Trust works. Family meeting! Trusts are often a useful legal and estate-planning device for protecting assets from estate taxes and providing a vehicle that ensures survivors get proper administrative and investment advice and counsel. An attorney is the best source of information about trusts and whether one would be appropriate for you.

Review beneficiary designations for your financial accounts. Every year, take a look at who you have named in your insurance policies and retirement plans. Are they still relevant to your needs and wishes? Many people think that if they have a will, they are covered. Sometimes beneficiaries designated in documents fall outside the scope of a will, so it’s critical that you keep your policies and records updated.

Specify where important financial account information is located. It may sound like an obvious thing to do, but few people keep a list of where important records pertaining to their savings, retirement plans, college-funding plans, mortgage and insurance reside. Keep a master list and review it annually to check for changes or additions.

Specify where important non-financial information and valuables are located. You have lots of important items that can and will become extremely relevant upon your passing. Think about the following: marriage certificates, birth certificates, titles/deeds for the house/cars, passports, jewelry, safe deposit box key, items in storage, etc. Consolidate, and tell someone where they are.

Planning for the end of life can feel uncomfortable, but preparing as much as possible and discussing these items with your family can make all the difference. It can help ease your concerns about the future, ensure your wishes are met, and protect the people you love.

If you have further questions, don’t hesitate to ask. We’re here for you.

The post How to Make Sure You and Your Family are Prepared for the End of Your Life appeared first on Hanna Agency.