Thomas Losher and Austin Ash are two innovative experts in the cash value life insurance space and young leaders within their organization. From growing up together as kids in Fort Wayne, IN to pioneering the future of insurance as colleagues, Thomas and Austin have developed a steadfast friendship centered on challenging one another to become their best selves. In this episode, they share their unique perspective on the value of life insurance and its importance in an overall financial plan for people of all ages.
We cover topics like:
- What exactly is cash value life insurance? How does it work and why would someone want to consider it as a part of their financial plan?
- Are there downsides to having cash value life insurance?
- Can you access funds in a cash value life insurance policy? What does that look like, and how does it affect the policy long-term?
- What is tax diversification and why is it important, specifically as it applies to our generation – Millennials and Gen Z?
Connect with Thomas Losher: LinkedIn
Connect with Austin Ash: LinkedIn
Face The Fear:
P.S. Kaitlyn Duchien, Austin Ash, and Thomas Losher are registered representatives of First Palladium, LLC, Member FINRA and a wholly-owned subsidiary of Ash Brokerage, LLC. Supervising office located at 888 S. Harrison Street, Suite 900, Fort Wayne, IN 46802. 800-589-3000. Content provided is for informational use only and is not to be constituted as financial advice.
On this episode of Face The Fear, we break down the basics of life insurance with Jenny Crabill, a fellow Millennial and Advanced Life Insurance Case Analyst. Here are a few of the questions Jenny helps us answer:
- What exactly is life insurance & why is it important?
- Why do I need life insurance now if I’m young, healthy, and don’t have anyone depending on my income?
- When is the best time to buy life insurance?
- How much does life insurance really cost?
- How do I purchase life insurance?
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Welcome back! Hopefully you read my last article, where I discussed three reasons why considering life insurance should be a priority. If one of these reasons resonated with you, or you have one of your own, I want to give some thoughts as to the different types of life insurance. Broadly, there are two categories: term insurance and permanent insurance.
Term insurance is simple – you pay an annual premium for the number of years in the term, and, other than a few exceptions, the insurance company will pay your beneficiary the death benefit if you were to die during the term of the policy. For example, I own a 20 year term policy, running from 2018 to 2038. If I were to die in 2030, my wife would receive the $1,000,000 death benefit, tax-free.
Permanent insurance is a little more complex. Within the category of permanent insurance, there are several types, but we will focus on the two main “flavors.”
First, there is “protection-based” permanent insurance. Protection-based permanent insurance is designed to provide a death benefit for your entire life. Instead of securing a death benefit for a 20 year period, this kind of policy can provide a death benefit to your beneficiary regardless of how long you live.
Second, there is “accumulation-based” permanent insurance. It also has a death benefit, but is really designed to grow cash value within an account housed at the insurance company. A portion of the premium you pay goes to cover the cost of your death benefit, a portion goes to the insurance company’s operating expenses, and a portion goes into an account for you. As you pay premiums, the cash in the account grows. Depending on the strategy of distributions, you can leverage this cash value in tax-advantaged ways.
So you are probably thinking…why wouldn’t I always buy permanent insurance over term, as it has much more benefit?
You guessed it: permanent insurance is more (and can be much more) expensive than term insurance. But, most millennials are at a point in their financial journey where permanent insurance is not only too expensive, but is unnecessary. You are likely better off focusing on maximizing your contributions to tax-advantaged accounts like a 401(k) or IRA, but also securing term insurance to protect your finances. (And, if you remember from the last article, term insurance sometimes can be converted into permanent insurance!)
Remember: the cheapest day to buy life insurance was yesterday. If you just need term coverage, you are in good company. If you can afford permanent coverage, that may be a better fit. Either way, make sure you are protecting the financial plan you work so hard to build.
Want more information on life insurance? Let’s talk! Face The Fear is here to help millennials make smart financial decisions that fit their lifestyle.
Article Contributed By: Xavier Serrani
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As a millennial, life insurance is likely not high on a list of financial priorities. With rent, student loan payments, and other essentials, life insurance premiums can seem like an unnecessary expense. When you’re young and healthy (read: invincible), what’s the benefit of life insurance?
I had these same objections just a few months ago. But then I learned more about the benefits, and I bought my first personal life insurance policy.
Here are a few reasons why:
- The cheapest time to buy life insurance was yesterday
Life insurance gets more expensive every year, so why not buy it as cheap as possible? For a 25 year old male in good health, the premium could be as low as $18 a month! This policy would provide a tax-free $100,000 death benefit to your designated beneficiary if you die any time in the 20 year policy period.
- Buying now secures your insurability for life
Let’s say you buy that 20 year term policy. If in 10 years you develop a significant health problem that could prevent you from buying more life insurance in the future, you are still protected. Even if you couldn’t buy life insurance because of your health impairment, if you currently hold a term policy, you can convert it into a permanent one, albeit for a higher premium, and keep it for life.
- It’s not for you – it’s for your loved ones
The main reason most people buy life insurance is to provide their family with tax-free money in the event of an untimely death. But what if you’re single and have no kids? Well, there are still plenty of people affected by your death! Your funeral expenses need covered, which can be $10,000 or more. Also, any co-signers on a loan you have may still have to pay that loan if you die. That $100,000 policy protects your family members. And remember, if you get married and have kids, but become uninsurable, you can convert the term policy into a permanent one.
Life insurance when you’re young is inexpensive and has long-lasting benefits. It protects your insurability in the event of future health problems, and protects your family in the event of a premature death.
Still not convinced? Or do you have other personal finance questions? Let’s talk! Face The Fear is here to help millennials make smart financial decisions that fit their lifestyle. Contact us at: firstname.lastname@example.org
 Protective Classic Choice Term, Male, Indiana, Age 25, $100,000, 20 year term
Article Contributed By: Xavier Serrani
Contact Us: email@example.com