Introduction To Life Insurance

Life insurance is a complex amalgamation of legal, tax, and economic elements. Basically, it is a unique wealth creation tool that assures the accumulation of the desired amount of liquid capital at death. Depending on the plan of insurance, it may also create more or less capital for lifetime needs. 

Through its unique capital creation feature and tax advantages, life insurance can help people solve a host of personal and business problems. However, insurers offer a wide variety of life insurance policies that are suited to a broad host of financial planning problems. Once an insurance adviser identifies a client’s problems, the adviser must match the appropriate life insurance products to the problems. To do so, the planner must first fully understand the legal, tax, and economic elements of life insurance and the particular features of each type of policy. 

This chapter will provide an overview of, as well as an introduction to, the multi-faceted aspects of life insurance. Use this chapter to gain and maintain perspective and balance. Because life insurance is not really one product but a multiplicity of products, above all, learn to “MATCH THE PRODUCT WITH THE PROBLEM!” 

Reproduced with permission.  Copyright The National Underwriter Co. Division of ALM

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