Life insurance

Why do I want life insurance?

The obvious answer is the death benefit. So the better question is: what is the benefit of the death benefit — and who is it actually for?

For most households it is protection: if the income stops, the plan does not. But there is more to life insurance than a payment to your family after you are gone. Inside a retirement plan it can do work while you are still here, and the type of policy matters far more than the size of the death benefit.

A hospital toe tag reading Game Over

What life insurance is used for

  • Protection for your family
  • Transfer of wealth
  • Tax-advantaged income in retirement
  • Tax-deferred growth of cash value
  • Establishing generational wealth
  • Business protection
  • Buy-sell agreements
  • Funding long-term care, or long-term care riders
  • Estate liquidity
  • Probate avoidance
  • Living benefits for serious illness
  • College planning
  • Charitable giving
  • Clearing debt at death, so it does not pass to a survivor
Not every policy does every one of these, and no single policy does all of them well. Which uses apply to you depends on the policy type, how it is funded, and how it sits inside the rest of your plan. Any guarantees, including death benefits and any guaranteed values, are subject to the claims-paying ability of the issuing insurance company. Tax treatment depends on your own circumstances and on policy design; we are not tax advisors, and you should confirm tax questions with your CPA.
Illustration of the drop in household income when one spouse dies

A simple term policy for family and wealth protection is the most common type of life insurance, and for many people it is the right answer. There are many other types and uses across term and permanent policies, and some carry favorable tax and accumulation treatment worth looking at. Which of those is appropriate is a question of your situation, not of the product.

How it works

  1. Determine your need

    From straightforward family protection through to advanced-market cases. The need comes first; the product follows it.

  2. Pick a type

    The type of life insurance matters more than the size of the death benefit. This is the step that gets skipped most often, and the one that costs the most when it is wrong.

  3. Compare quotes

    We are appointed with dozens of insurance carriers, so the comparison is across the market rather than one company’s shelf.

  4. Apply

    Health is a major factor in rates, but depending on how the policy is used it may not be the deciding factor. In some advanced cases the policy is not even written on your life.

Not sure which of these applies to you?

Talk it through with us

Goat Planning is an insurance and retirement income practice. Jeff Batson is a Registered Financial Consultant® licensed in life, health, annuities and Medicare; he is not an attorney, CPA, or securities-licensed advisor, and nothing on this page is legal, tax, or investment advice. Life insurance policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force; your agent can provide complete details. Any guarantees are subject to the claims-paying ability of the issuing insurance company. Policy loans and withdrawals will reduce the death benefit and cash value, and may have tax consequences if the policy lapses or is surrendered.