PART 2 OF 3: Money Protection To Create The Retirement Of Your Dreams

Why do we seek a death benefit?

It could be to leave a legacy, or maybe it's the most cost-effective choice.

There are also tax-free benefits available.

Now, you might associate Death Benefits with Life Insurance and what happens when someone passes away.

But today, we'll explore other aspects of it, particularly its role in supporting our dependents, such as our kids or young adults.

Hi! I'm Jason Bergquist. I'm the owner and founder of RetirementOfYourDreams.com.

Today, we’re diving into Part 2 Of 3: Money Protection To Create The Retirement Of Your Dreams.
If you missed Part 1 about Long-Term Care, click HERE to watch Part 1 in this series.

In today’s video, we’ll delve into Death Benefits.

1. Navigating Death Benefits and Living Benefits
2. Why You Need Life Insurance
3. Steps to Determine Your Ideal Life Insurance Coverage

Let me introduce myself if we still need to meet. I'm Jason Bergquist!

I joined this business to help people create the Retirement Of Their dreams.

I've been doing this for over 20 years through the ups and downs of the markets.

My whole goal is to help educate people. Help them understand how to set up the retirement of their dreams and bring hope back into their lives.

I realized this was my calling in 2010 when I was going through a divorce. At that time, I was financially low, and I realized that I wasn't practicing what I preached.

So, I committed to practicing what I preached and became an Independent Financial Professional and a Certified Financial Fiduciary.

This experience allowed me always to do what's in my client’s best interests.

Now, I have a team of experts helping me figure out all of the best options that are out there to empower you to create the Retirement Of Your Dreams.

Okay, let’s jump into Part 2 Of 3: Money Protection To Create The Retirement Of Your Dreams,

Let’s explore what living benefits entail and why you should consider them in your death benefit options, starting with ...

We all recognize that a death benefit is essentially a life insurance plan. It's what you or your loved ones receive when you pass away.

But the critical question here is: What do we truly need in terms of death benefits?

To answer that, we must explore the various options available.

It's not just a one-size-fits-all situation. There's an exciting twist regarding death benefits – the possibility of incorporating living benefits.

Think of it as an extra feature, like a rider or part of the policy.

When searching for a death benefit, it's wise to look for a plan that offers you access to funds while you're still alive.

These funds are drawn from your death benefit and can be used to cover unexpected medical expenses.

Let's delve deeper into this concept.

Some of these criteria overlap with what we discussed in Part 1 about Long-Term Care, particularly regarding your ability to perform daily tasks.

Depending on the life insurance policies and what they include in their Living Benefits options ...

... you could qualify if you have a Chronic Condition and are not able to perform 2 out of the 6 ADL’s but you will qualify if you have a terminal or critical illness.

Essentially, if you can estimate your life expectancy and find yourself facing significant medical expenses, these policies can provide you with funds to cover those costs while you're still alive.

The amount they provide will later be deducted from the total death benefit your family receives.

On one hand, there are those unfortunate stories of individuals who didn't have the insurance coverage they needed when they passed away.

This often leaves their families in dire financial straits. They might have to sell their homes, downsize, or relocate to more affordable areas.

Sometimes, people resort to crowdfunding campaigns, like GoFundMe, to bridge the financial gap in times of unexpected need.

But here's the thing – we want to ensure a solid plan for our future, no matter what unfolds.

Life can be unpredictable, whether premature, early, quick, or drawn out due to medical reasons.

I first met Karen and her husband, Bob, in 2020. We were building their retirement plan, which included a critical aspect – life insurance.

We were excited, setting up all their future pieces like a giant puzzle. We had dates and dreams all sorted out.

Then, one day, a phone call shattered our plans. It was Karen, and her voice was heavy with sadness.

She told me that Bob had been in a terrible car accident, which was so awful that he didn't make it. He was gone, just like that.

You see, part of our planning was making sure they had insurance. It's like a safety net for your money and your family.

Even though the news was heartbreaking, one thing I could tell Karen was that she didn't need to worry about money right now. We had that part covered.

Karen could take her time to grieve and process everything without financial stress.

Of course, there were some forms to fill out to access the money, but that was a minor concern compared to her grief.

Luckily, the person who hit him was an insured motorist.

So, Karen received a benefit from the motorist’s car insurance company, an additional death benefit.

So, Karen got money from Bob's life insurance and the motorist’s insurance company.
It was like a little extra help during such a tough time!

Now, we can't control accidents or stop bad things from happening.

Life can throw some hard curveballs. But this story teaches us something important. Planning carefully and having the right insurance is like having an umbrella in a storm.

It won't make the sadness go away, but it can help keep us a bit more secure until the sun starts shining again.

This might sound a bit like homework, but it's essential:

Step 1: Start by checking the insurance you already have. Just like you wouldn't want to pay for a phone insurance plan you don't need, we don't want you paying for insurance you don't need either.

Think about it like this: You always try to find the best medical insurance, right? You want to be sure it covers what you need.

The same goes for car insurance. You don't want to pay for too much or too little ...

... It's the same idea with life insurance!

Step 2: First, figure out what kind of coverage you need. How much do you need? Do you have kids?

If you do, you might need more coverage. What about the person who's bringing in the money for your family? That's important. How much do you need for them?

Now, think about this: If both you and your spouse work and bring in money, what if one of you can't anymore?

That's a big deal. And if there's a stay-at-home parent, what if something happens to them? You'd suddenly have extra costs, like childcare.

We need to plan for that, too.

Step 3: Look at the insurance you have right now. Gather all the details. If you want, you can send it to me, and I can take a look.

We'll figure out if you have the right amount of coverage, not too much, not too little. We want it just right, like Goldilocks and the Three Bears!

Don't worry; there are clever ways to determine how much coverage you should have compared to what it costs. It's like finding the perfect puzzle piece to fit your plan.

So, your job for now is to go and check what insurance you have. After that, we'll discuss what kind of insurance you might need or if there are better options.

It's like putting together a puzzle to ensure your family's safe and sound future!

People have different reasons for wanting life insurance.

One common reason is to leave a legacy. Imagine it like this: you're saving money for your retirement.

Once you retire, you can use that money to enjoy your golden years, do everything you've dreamt of, and have a blast.

But here's the thing:

Some folks want to leave something special behind for their kids or loved ones. They want to ensure their family is cared for, even after they're no longer around.

And guess what?

How does it work? You have four kids and want to leave $250,000 for each. That's a total of $1 million you want to pass on.

If you buy a million-dollar life insurance policy that costs you $150,000 in premiums over your lifetime, you might think, "Wow, that's a lot!"

But here's the clever part: your family gets that entire million dollars when you pass away, tax-free. Yes, you heard that right – tax-free!

This means they don't have to give the government a big chunk of it.

So, even though you spent $150,000 on insurance, you left your family $1,000,000 instead of just leaving them the $150,000 you saved.

Bottom line: Life insurance can help you leave a powerful legacy for your loved ones, and they won't have to worry about taxes eating into it. It's like a gift from beyond the stars!

Let's dive a bit deeper into the living benefits of life insurance. Imagine you're setting up a life insurance policy. There are plenty of options!

Here's how it works: Living benefits allow you to access money from your life insurance policy while you're still alive.

This money comes from your death benefit bucket, the amount your beneficiaries receive when you pass away.

You can usually get up to 100% of the policy's face amount or death benefit as a living benefit. However, many policies have a maximum limit, often around $500,000.

Say you have a million-dollar life insurance policy, and unfortunately, you're facing severe medical bills totaling $500,000.

That can happen – we've all heard those stories. In this situation, your life insurance policy can provide you with up to that $500,000 to cover your medical expenses.

But keep in mind, different policies might have varying caps and withdrawal limits. Some policies may only allow you to access 50% or 75% of the death benefit.

So, the key is to figure out your specific needs, explore your options, and determine the right coverage for you. It's like tailoring a suit – it should fit you perfectly!

I once met with a young couple who had a child. The wife strongly believed they needed life insurance, primarily for her husband.

However, he was hesitant due to the cost.

After much discussion, luckily, the wife won out (as they usually do  ), and they decided to get life insurance for him, with the possibility of adding coverage for the wife, who was a stay-at-home mom, later on.

Sadly, a tragic snowmobile accident took the husband's life just a few weeks later.
It was a freak accident, and he was very young.

This devastating event highlighted the importance of having a death benefit in place. Still, it's also worth noting that many life insurance policies offer additional benefits like long-term care coverage.

This can be crucial because, as we all know, even young people can face serious health challenges like cancer.

The husband was planning a fishing expedition in Alaska, which can be quite adventurous.

At his wife's insistence, they decided to get life insurance coverage for both of them and eventually added their children to the policies.

Fortunately, his Alaska adventure went smoothly, and he returned safely.
Today, he's thriving in his business.

But this experience reminds us that vacations or activities involving some level of risk should encourage us to consider what kinds of protection we need.

So, these stories underscore the importance of thinking ahead and ensuring you have the right coverage in place ...

... especially when you have loved ones depending on you.

Life can be unpredictable, and it's better to be prepared for the unexpected!

It's essential to tailor it to your specific needs.

Here are some general guidelines to consider:

• Assess Your Needs: First and foremost, we need to figure out how much coverage you require.

This can vary widely depending on your circumstances. It could be a multiple of your income, like 15 to 20 times your annual income.

Or it might involve calculating your income plus any outstanding debts and additional expenses.

• Consider Long-Term Needs: Keep in mind that your family might have long-term financial needs.

If your family has a history of not living very long or if you're concerned about potential medical expenses towards the end of life, or cancer runs in your family, you might want to add more coverage.

This could involve a factor like 20 times your income plus liabilities and an extra amount allocated for long-term care.

• Customize Your Coverage: Everyone's situation is different, so your life insurance should be customized to your unique circumstances.

Factors like your family size, financial goals, and health play a significant role in determining your needs.

• Explore Different Options: Life insurance comes in various forms. There are group policies offered through employers, which can be a good option.

These policies often provide some basic coverage, but it might not be sufficient.

Remember, the key is to find the right balance between the amount of coverage you need and what you can afford.

It's also a good idea to review your coverage periodically, especially when significant life events occur, such as getting married, having children, or purchasing a home.

This ensures that your life insurance remains aligned with your evolving needs and goals.

It's important to take advantage of the life insurance benefits offered through your workplace.

Group insurance provided by your employer is often the most cost-effective way to get coverage.

• Limited Coverage Period: Employer-sponsored life insurance typically covers you only while you're employed with that company.

If you change jobs or retire, you may lose this coverage.

• Coverage Gaps: Life insurance needs often extend beyond your working years.

If you rely solely on employer-provided coverage and something happens when you're not employed, you may not have the protection you need.

• Accidents and Timing: Accidents can happen at any time, and life insurance is there to provide financial security for your loved ones.

If you're between jobs or transitioning careers ...

... you might not have coverage when you need it most.

Given these considerations, it's advisable to supplement your workplace life insurance with a personal life insurance policy.

This ensures that you have continuous coverage, even during employment changes or retirement.

Additionally, personal policies often offer more flexibility and can be tailored to your specific needs.

So, while it's a smart move to enroll in your employer's group insurance plan ...

... it's equally important to explore additional coverage options to create a well-rounded insurance strategy that provides adequate protection throughout your lifetime.

Term life insurance is a popular option for many people due to its affordability and flexibility.

• Affordability: Term insurance is typically the most cost-effective life insurance option. You pay premiums for a specific term, such as 10, 20, 30, or even 40 years, and it provides coverage during that period.

• Flexibility: Term policies offer flexibility in choosing the coverage amount and term length. You can match the policy's duration to your specific needs.

For example, if you have a 30-year mortgage, you can get a 30-year term policy to cover the mortgage amount.

• Convertible Options: One important feature to look for in term insurance is convertibility.

This means you have the option to convert your term policy into a permanent life insurance policy without a medical exam or proving insurability.

This can be valuable if your needs change, and you want to maintain coverage beyond the initial term.

• Temporary Coverage: It's important to note that term insurance provides temporary coverage only.

Once the term ends, you'll need to decide whether to renew the policy (which can be costly as you age) or seek other coverage options.

• Supplemental Coverage: Many people use term insurance as supplemental coverage in addition to a permanent life insurance policy.

Permanent life insurance, such as whole life or universal life, provides coverage for your entire lifetime and includes a cash value component.

A permanent life insurance plan, such as whole life or universal life insurance, offers several benefits that can provide financial security and peace of mind for you and your loved ones.

1. Lifetime Coverage: No matter when you go your family will be taken care of and you never have to requalify for Coverage, you can start this on kids as early as 15 days old.

2. Cash Value Growth: This component grows over time. A portion of your premium payments goes into this cash value, which can be invested and grow tax deferred.

You can borrow against or withdraw from this cash value for various financial needs, such as paying for education or supplementing retirement income, giving you something that you hear me say all the time ...

... adding another Stream of Guaranteed Income For Life ... TAX FREE!

3. Tax Benefits: Money grows tax-deferred and pays out to you tax free. Additionally, the death benefit is paid out to beneficiaries tax-free as well! Great way to pass on wealth.

When considering term insurance, it's essential to assess your specific financial goals and needs.

Term insurance is an excellent choice for covering specific financial obligations during a defined period, but it may not provide the lifelong coverage or investment features that permanent life insurance offers.

The option to convert term insurance to permanent coverage can be a valuable safety net if your circumstances change and you become ‘uninsurable’. Which is when you often need it most.

A Client of mine, we will call him Todd, found himself facing a situation where he needed life insurance for his daughter.

At the age of 16, she began experiencing various health issues. It was a challenging and worrying time for their family, but it made it made them realize the importance of having proper insurance coverage.

They decided to get her a policy of her own, a convertible term life insurance policy. This type of insurance has proven invaluable for many families, including his.

First, the convertible term policy offered them flexibility.

It meant that, if needed, Todd could convert her term coverage into a permanent life insurance policy without the hassle of a medical exam or proving her insurability.

This flexibility was crucial because it meant they could adapt to changing circumstances without any added stress.

Second, by converting to a permanent policy, Todd secured lifelong coverage for his daughter.

This was vital for their peace of mind. It ensured that she would have financial protection throughout her life, regardless of what health challenges might arise.

Third, it protected her from uninsurability.

Life is unpredictable, and health issues can emerge unexpectedly. If she became uninsurable due to a medical condition, the convertible term policy would be a lifeline.

We could convert it to a permanent policy, guaranteeing her continued coverage.

Fourth, it was about safeguarding her future.

As parents, we want to make sure that we will have financial support in place for our loved ones, even after the initial term of their policies expire.

Finally, the policy they chose also offered living benefits, including accelerated death benefits. These benefits provided an added layer of financial security.

They meant that if she ever faced a terminal or critical illness during the term of the policy, she could receive financial assistance precisely when she needed it most.

In the end, getting that convertible term life insurance policy for Todd’s’ daughter was a decision that brought them peace of mind during a challenging period.

It emphasized the importance of planning for the unexpected, ensuring that our loved ones would always be protected, no matter what life through our way.

It's a conversation every family should have to secure their future and provide for their children's well-being.

First, we delved into the world of death and living benefits and why it's essential to ensure your life insurance covers both aspects.

This comprehensive coverage provides financial security for various situations.

Next, we explored the reasons behind needing life insurance.

These reasons can vary widely, from leaving a legacy for your loved ones to finding cost-effective options and enjoying the tax-free benefits that life insurance provides.

We also touched on how life insurance can be a crucial component of a long-term care plan.

We then took a closer look at term insurance as a viable option, especially if you're considering coverage beyond what your workplace or group insurance provides.

Term insurance offers affordability and flexibility.

However, it's essential to make sure your term policy is convertible to a permanent policy, ensuring lifelong coverage and peace of mind.

Regarding workplace or group insurance, we emphasized the importance of taking advantage of these offerings to secure cost-effective coverage.

Still, we also stressed the need to have an additional life insurance policy outside of your job to provide continuity in case you change employment or retire ...

... making obtaining coverage later in life more expensive or impossible.

Lastly, we highlighted the importance of considering life insurance for your children and the various approaches available to address their unique needs.

Life insurance isn't just about planning for the "what ifs."

It's about proactively safeguarding your family's financial future.

In the end, the key takeaway is to have a comprehensive life insurance plan in place ...

... tailored to your family's unique circumstances ...

... and designed to provide security ...

... and peace of mind ...

... regardless of what life may bring!

1. Navigating Death Benefits and Living Benefits
2. Why You Need Life Insurance
3. Steps to Determine Your Ideal Life Insurance Coverage

So now you understand how to review your current life insurance coverage to ensure it aligns with your needs and goals ...

... Explore the possibility of adding long-term care coverage to your life insurance plan, providing comprehensive protection ...

... Determine the right amount of coverage for yourself, your spouse, and your children, considering your unique circumstances ...

Stay tuned and join us next week for Part 3 of our Money Protection series, where we’ll discuss the impact of inflation on your financial security.

Remember that addressing financial challenges, like inflation, is crucial for securing the retirement of your dreams.

Please scroll down and let me know in the comment section below, “What was your BIGGEST takeaway from this week’s video?!”

Thank you for considering Retirement of Your Dreams as your partner on your financial journey!

Committed to empowering you to achieve the Retirement Of Your Dreams,

Jason Bergquist