Before buying life insurance, should I speak with a financial advisor?

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Asked December 3, 2014

1 Answer


Depending on what type of life insurance policy you are buying, consulting with a financial planner or advisor might be a good idea. Even if the advisor is not helpful in making the purchase decision, they can be extremely helpful in guiding you towards a policy that pays out with less tax, or to multiple beneficiaries.

Financial planners look at your entire financial activity and help you decide on future courses of action. Buying life insurance is one such action, along with purchasing savings and investment accounts. As a rule, financial planners are more involved in helping you plan for your own financially secure future, but life insurance is one of many tools that can help you there. You may gain more benefit from a financial planner if you are working on a total financial strategy instead of simply shopping for life insurance, because financial planners are typically more involved in long-term investments such as IRA's or annuities.

If you are considering a term life policy, you may not need a financial planner. Term policies are typically purchased to protect a specific financial aspect or goal, such as paying off the family home or setting up a trust fund for your child's college tuition. Even here, a financial planner may show you some options that you had not thought of and will probably be able to show you how to set the policy up so that your beneficiaries, not the government, get the majority of the settlement.

For permanent life insurance, a financial planner may be a very good asset to have. Since most permanent life insurance policies have cash values that can be accessed or manipulated while you are living, a financial planner is in a good position to help you decide the best type of policy and investments for your specific needs and life goals. The job of a financial planner is to help you achieve financial security, and if you have a lot of assets to protect, they can save you a lot of money in fees and axes further down the road.

Answered December 3, 2014 by Anonymous

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