Wooden blocks representing life insurancePrimarily, every person should have health insurance and life insurance. Depending on your specific needs, home insurance or auto insurance may be necessary, as well, but not everybody owns a car or a house.

Life Insurance

Life insurance is crucial if you have any financial dependents, whether that be children, a spouse, an ex-spouse, underage siblings, employees, or even business partners.

In order to understand life insurance, you need to understand the four primary parties that are involved in a life insurance policy:


  • Insurer: The insurance company that is responsible for collecting premiums and paying out claims, in the event of a death of the insured.
  • Insured: The person whose life is covered by the insurance policy.
  • Owner: The person who actually owns the life insurance policy. This is characterized as the person who pays the premium payments, and may or may not be the same as the insurer.
  • Beneficiary: The person or entity (such as a trust) who receives the claim from the life insurance, in the event of the death of the insured.


There are two main types of life insurance to note:


  • Term Life: The policy owner pays premiums for a set term (such as 10, 20, or 30 years). The premiums are put at a set rate over the term. If the insured dies in that period of time, then no policy is paid. Term life is usually more cost-effective, but if the insured dies outside of the term life, then no amount is paid to the beneficiary.
  • Permanent Life: Unlike term life policies, permanent life policies don’t expire. In addition, the savings that are put into a permanent life policy can build a cash value that the policy owner can borrow from.


Health Insurance

While the mandate portion of the ACA is currently no longer in place, it is still incredibly important for every person in the United States to be covered under a health insurance policy. Currently, under the ACA, there are several mandated areas of coverage that insurance companies are required to cover under all policies. These include the following:

  • Hospitalization
  • Newborn care
  • Pregnancy care
  • Mental health services
  • Prescription drugs
  • Outpatient care
  • Emergency care
  • Lab tests
  • Children’s dental care
  • Preventive care


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If you’d like to know how insurance should fit into your financial plan, then don’t hesitate to give our team a call, today! We can help you arrange your finances to set you up for future success and stability.