Choosing a life insurance policy is an important decision. In addition to traditional insurance company information, numerous online resources now also help educate consumers. However, to help them make the right decision about the type and amount of life insurance to purchase, consumers still turn to a professional – an insurance agent.
Within the two basic categories of insurance, permanent and term, there are a variety of options. When consumers have questions – such as “Should I buy a term policy for five years, or for 10?” or “How do I calculate how much I will need for final expenses?” – they seek the advice of an experienced agent. At the UNA, licensed agents will help you weigh the pros and cons of different choices, and most can do so fluently in both English and Ukrainian. Whether the questions require a simple answer or a multi-step strategy, the UNA has options for either situation.
A young couple’s future
Danylo and Marika, newlyweds, were both in their late 20s. Both had good jobs. Danylo’s job offered him a term policy; Marika’s job did not. They had auto loans and a combined student loan debt of about $25,000. They wanted to save for a down payment on a home and to add to their financial cushion. They wanted to start a family. By then, Marika hoped to work only part-time.
After doing some research online, Danylo decided that they should buy a 10-year term policy for Marika equivalent to the one he had at work.
Marika called her mother’s friend, a UNA branch secretary and licensed agent. After meeting and speaking with the couple, understanding their priorities, the agent gave the couple her recommendations.
“I understand your desire to save money in the short term, however, I also want you to understand how you could save money in the long term,” she told them.
While one term policy would be the least expensive, it would not answer all their needs, nor serve them well in the future, given their goals. If Danylo suddenly lost his job in four years and the new employer did not offer term, Danylo would be back to searching for term insurance for himself, this time at a higher price. And, if they began to search for permanent insurance in 10 years, they would find that premiums would be higher for them both.
A better strategy, she said, is to choose a base amount of permanent insurance now, for each of them. To meet their goal of putting as much money into savings as possible, she recommended the UNA policy “P65” – a permanent insurance policy that would be completely paid off when they were age 65. If they were to wait even 10 years, the same amount of insurance in the same policy would cost the couple 60 percent more in monthly premium payments. “The best time to purchase permanent life is when you are young,” she emphasized.
After purchasing their home and starting a family, they would already have a permanent policy in place for a reasonable rate – and for a rate that would never increase. If necessary, smaller term policies could be purchased as needed to supplement this base.
Danylo and Marika chose two permanent policies. Five years later, after purchasing a home and starting their family, they bought an additional, smaller term policy for Marika.
Vasyl’s company in the Midwest downsized and he took early retirement at age 57. He wasn’t very optimistic about finding equal employment any time soon and did not really want to start again with another employer. With the blessing of his wife, Vera, Vasyl decided to start a career in real estate – specifically rehabbing and flipping houses, maybe even managing them as rentals. He had good experience, having helped his cousin over the years and rebuilding most of his personal home. And he knew he was a good manager. Yet, both Vasyl and Vera understood that this new venture was a risk.
Vera contacted a UNA agent. She was concerned. To get Vasyl’s business started, the couple had decided to take out a line of credit against the value of their home. Plus, Vasyl’s term life insurance had ended with his employment. Although Vera planned to work for 10 more years, she worried that, in the event of Vasyl’s unexpected death, the couple’s permanent life insurance would not cover future living expenses, family obligations, her final expenses, as well as the new debt.
Vasyl, however, was confident that he would not die and that his business would work. His first choice was to buy a term policy for five years, maybe 10, believing that by then the debt would be paid off, therefore their risk reduced. Yet after closely listening to Vera’s concerns, Vasyl agreed to the UNA agent’s recommendation – a 20-year term policy. The difference in monthly premiums was small, noted the agent, but the resulting peace of mind was big.
“And with a 20-year term policy at the UNA,” added the agent, “at a certain point the policy begins to gain cash value. It’s a big bonus for policy-holders.”
Vasyl liked this benefit. He also liked the option of converting the term policy into permanent life before the end of 20 years or before age 70 without the requirement of a medical exam. These two options gave the UNA 20-year term strong added value compared to other policies.
* * *
To learn more about how a UNA agent can help you determine your insurance needs, or to learn more about the many cost-effective products offered by the UNA, please contact the UNA at the toll-free number 800-253-9862. Like the UNA on Facebook.com/UkrainianNational Association, or visit online at www.ukrainiannationalassociation.org.