David Lerner Associates News: Five Ways to Power Up a Life Insurance Generator
In the aftermath of Hurricane Sandy in 2012, thousands of people in the Northeast were without power for weeks, if not months. If you ask those who had the foresight to purchase a generator before the storm hit, many of them will probably tell you it was one of the best investments they ever made.
You have probably never thought about life insurance as a generator, but the aftermath of Hurricane Sandy makes the parallels clear, says Dan Gardella LUTCF, CLTC, vice president of Insurance Operations for David Lerner Associates. “The things we all take for granted — electricity, heat, running water — were gone for many people. But those with a generator could at least turn on their lights and take a hot shower. They were a little more at ease.”
Eventually, the aftermath of the storm passed, and things returned to normal for most people. “But when a loved one dies, they’re not coming back,” says Gardella. “How do their surviving family members and loved ones power up their resources?”
Gardella identifies five key areas that can be “powered up” by plugging into a “life insurance generator:”
1. Family protection — When a primary breadwinner in the family passes on, so does the income that he or she earned. Therefore, Gardella says that income replacement is one of the many reasons people buy life insurance.
“The death benefit from a life insurance policy can provide funds that enable surviving family members to maintain their lifestyle — to stay in their home, for example, or for children to stay in college or a private school.”
2. Supplemental retirement income — A whole life (or permanent) insurance policy with cash value can provide cash to supplement a pension or other retirement savings plan during retirement. “Who knows what the status of Social Security is going to be when people are ready to retire?” says Gardella.
3. Mortgage protection —A life insurance policy can provide a cash lump sum that can be used to pay off a home mortgage if a family’s primary breadwinner dies unexpectedly.
4. College funding — In the same way that the cash value from a whole life policy can supplement retirement income, it can also provide money to help pay for your children’s college educations. “You can build up cash value and dividends in a policy to help put your kids though school,” says Gardella.
5. Long-term care — According to Gardella, life insurance policies can be bought today that include a long-term care rider. “This gives you a living benefit of monthly cash to help pay for long-term care expenses if you need them later in life, as well as a death benefit for your surviving family members and heirs.”
In speaking with families about life insurance, Gardella says he often hears them say that they can’t afford the premiums, “but it’s important to look at all the benefits you may receive by paying life insurance premiums.”
All insurance benefits are paid subject to the claims-paying ability of the issuing company. Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. Member FINRA & SIPC
Life Insurance Generator
David Lerner Associates identifies five key areas that can be “powered up” by plugging into a “life insurance generator"
Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates 1 800-367-3000 Visit our website: http://www.davidlerner.com
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