CRC Planning

What is term life insurance?
Term life insurance is a financial contract between the insurer and the insured that provides a specific death benefit if an insurable action occurs during the contract period.  Basically, you purchase the life insurance policy for a fixed number of years and if you pass away while it is force, your beneficiaries receive the amount of insurance on the policy.


How many years worth of insurance do I need?
Again, it depends on each person’s unique situation.  Generally, we recommend that you get a long enough term to cover the time your children are in the home or until major debt obligations, like a mortgage, have been paid off.  Go to the insurance needs calculator.


What is permanent life insurance?
Like term life insurance, it is a contract between the insured and the insurer to pay a specific amount when a “trigger” event happens (in this case death).  However, where term life insurance covers a specific period of time (for example:  20 years) a permanent policy covers your entire life.  So if you pass away 5 years after getting the policy or 50 years, the result is the same.


I’ve not heard of “permanent life insurance” – why is that?
Permanent Life Insurance is a phrase we use as an umbrella for all life insurance policies that cover your entire life.  Some of the more popular types of permanent life insurance are:  whole life, universal life, and variable universal life.


What type of coverage does CRC Planning provide?
We provide term life insurance, which takes care of many life insurance needs.


How Much Life Insurance Should I Have?
There is no quick and easy answer to this question.  Some life insurance agents will tell you that you need 10 times your annual salary.  Others will tell you that you need closer to 15 times your annual salary.  The real answer is: it depends upon your situation.  When you are trying to figure out how much term life insurance you need, consider factors like:

• Where do you live?
• Do you own your home?
• Do you have children?
• How old are your children?
• What range of finances do you want for your spouse if something should happen to you?

A family of four could need as little as $250,000 in term life insurance or as much as $2,000,000 in term life insurance – it all depends on the wants and needs of each family.

What happens to my family financially when I die?

• Many of us know someone who lost a parent at a young age or a spouse in the early-to-mid stages of marriage.  What is the impact on those who are left behind?
• Will your spouse be able to stay in dream home you purchased together?  Will he or she be able to give time to your children or will work be the primary focus to keep a roof over their heads?  Will the lives of your children be uprooted as well as being turned upside-down due to your death?
• Now is the time to get prepared.

Why do I need Life Insurance?  

• Life insurance is not for you – it is for those you leave behind.  When you die, your family is left here to deal with that impact, emotionally and financially.
• Depending upon your planning, the impact can be severe or your family can feel safe.  Perhaps you were the primary breadwinner or the primary caregiver – how would your loss impact your family?  Your family will be affected spiritually, mentally, and emotionally.
• If you have term life insurance in place, you can help alleviate some of those emotional and mental burdens by providing some financial security to your family to help give them time to deal with your passing.

What do you want to accomplish with your Term Life Insurance?

There are many ways term life insurance proceeds can be used, including:

   Paying Off Your Home:

• For many families, a mortgage payment often represents the largest expense in the monthly budget.
• Life insurance proceeds are used in many cases to pay off an existing mortgage to eliminate that monthly expense or the proceeds are used to buy a new home.  The benefit of using your term life insurance money to pay off a home is that it can drastically reduce the family's monthly expenses.
• You have options.  Your spouse can wait to go back to work until your children are old enough to be on their own (provided that there is other money), work part-time around the hours your children are in school, or just have more money in his or her bank account at the end of the month, reducing the stress of finances.

   Debt Repayment:

• In many cases, debt that was the sole responsibility of the deceased does not get passed on to spouses and/or heirs.  However, that is not true in all cases.  Consult a tax professional and/or a lawyer for more details.
• Debt that was accrued jointly (such as car loans) remains in effect and becomes the responsibility of your spouse.  You can use term life insurance to pay off debt obligations and leave your family debt-free.  This can relieve some of the financial stresses and frees money to be used for other needs.

   Other Immediate & Long-Term Needs:

• There are virtually no limitations on how the proceeds from your term life insurance policy can be used.  The funds can be used for other immediate or long-term needs.

Future Planning Concerns:

   Generate Income for Survivors:

• If the loss of your income will strongly affect your family, then you may want to purchase extra insurance in order to generate income for them.
• Your Life Insurance Specialist can help you determine what amount is appropriate to accomplish this goal.  Sometimes our CMPs want to generate enough income to replace their entire salary, sometimes it is enough to make sure the major bills are paid (like the mortgage), and sometimes it is enough income to last a few years while the surviving spouse finishes a degree or until the kids are old enough to be on their own after school.

   College Funding:

• Even when adjusted for inflation, the cost of college is more expensive today than at any time in the past.  If college tuition costs $7,500 per year today, a child born in 2007 can expect to pay more than $90,000 for a four-year degree (assumes the costs rises by 6% per year).  As the government continues to cut education and give more entitlements to the elderly, you can reasonably expect that price to rise.
• One of the things your insurance can do is fund a college education for your child.
• Imagine giving your child the freedom to go the college of his or her choice.  Imagine giving your child the financial freedom not to be saddled with $100,000 in student loans.  If your life insurance is set up properly, you can provide that freedom.

   Other needs:

• We each have unique situations and needs.
• A Life Insurance Specialist at CRC Planning can help you determine your family’s needs and how to fund them.

How can CRC Planning help with your Life Insurance needs?

CRC Planning provides term life insurance to all of our clients and to anyone else who would like life insurance.

• Term life insurance is different than permanent life insurance (like whole life or universal life) because it covers a certain period of time, typically 10, 20, or 30 years.
• If you die while the policy is in force, the life insurance proceeds will pay out to your beneficiaries.
• Term life insurance is often used to help cover periods of life when there is a much higher insurable need than at other times in your life.  For example, a 30 year-old man with three kids has a much stronger need for insurance than a 50 year-old man who is an empty nester.

What if I’ve tried and can’t get Life Insurance? 

CRC Planning has partnered with some of the best life insurance companies in the nation to help you get quality and affordable quotes on your term life insurance.  Perhaps you’ve been turned down in the past due to:

• Travel
• Family health history
• Personal health history
• Dangerous hobbies or avocations
• Or other reasons