What Type of Life Insurance Should You Own?

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Life Insurance: How does it work and do you really need it? Are you worth more or less alive or dead? What you need to know to protect yourself and your loved ones.  

In this episode of the Finance For Physicians Podcast, Daniel Wrenne talks about what type of life insurance you should own. When you are young and healthy, cover your life or earning potential because the risk of untimely death happening is extremely low, but the costs of income loss are extremely high.

Topics Discussed:

  • Life Insurance Recommendations: Understand conflicts, know what to look for
  • Why get it? Tomorrow isn’t guaranteed, avoid leaving family in a financial pinch
  • When to get it? Before you urgently need it, when everything is good
  • How much does it cost? Depends on health and age
  • How much will you need? Enough, but always told to buy more
  • How long will you need it? Longer the lock-in period, the more expensive
  • Insurance Industry: Agents receive a high percentage of premiums for policies
  • Advisor vs. Agent: What are the differences? Incentives? Disincentives?
  • Coverage Calculations: Identify the correct amount of death benefits based on goals
  • Types of Life Insurance Coverage:
    • Human Life Value: Wrongful death determines lost earnings
    • Financial Need Analysis: Maintain specific lifestyle, goals, assets, liabilities
    • Term Life: Temporary death benefits for a set time period
    • Permanent: Combines cost of term plus investment component
    • Conditional: Secure coverage immediately before underwriting 

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