There are few conversations more discomfiting than those centered on life and death. Wondering what happens after we pass is one thing, but knowing that we left behind our loved ones with a financial mess is another thing altogether.
Mark Hauser is an experienced private equity investor who has worked diligently to connect his clients with the financial services that best improve their lives. Hauser recently took on the topic of life insurance policies so that he could better educate his followers on the topic and so that they could make better and more informed decisions.
Let’s learn about life insurance policies through the lens of Mark Hauser, co-managing partner at Hauser Private Equity.
Defining Life Insurance
Life Insurance is as simple as it is complicated. A life insurance policy is a contractual agreement between a policyholder and their chosen life insurance company. For example, a policyholder can be insured by multiple parties, including themselves and their workplace.
Throughout the lifetime of a regular policyholder, they will pay premiums to the insurance company. Payments can take the form of lump sums or recurring payments. Upon the loss of life of the insured individual, one of the named beneficiaries will receive the “face value” or “death benefit” of the policy.
If a policy has a $100,000 Face Value, that value would be passed to the beneficiary or beneficiaries upon the policyholder’s passing.
Pros and Cons of Life Insurance
Like any other policy, life insurance is a personal choice that requires genuine reflection and a more complete understanding of the topic for an informed decision. While Mark Hauser believes in the benefits of insurance policies, he also suggests his clients consider the pros and cons to choose for themselves.
Pros
- Replaced Income for the Insured
- Financial / Emotional Stress Reduction
- Gift To Favorite Non-Profit
- Loan Privileges
- Tax-Deferred Appreciation
Cons
- Expensive Premiums For Older, Less-Healthy Individuals
- Medical Exam Required
Selecting the Right Life Insurance Policy
If life insurance policies look like the right pathway for an individual, Mark Hauser suggests they undergo a simple process to select the right policy. Hauser believes in taking time to ensure you prepare as much as possible to make the right choice for your loved ones.
Here are a few integral steps to selecting the right insurance policy.
- Is Coverage Necessary?
- How Much Do I Need Covered?
- Shop Around For Optimal Prices / Insurance Packages
- Discuss Your Plan With Beneficiaries
- Decide if Riders Are Needed For Additional Benefits
With some preparation, finding life insurance can look significantly less scary and more approachable.
