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SFB081 Basics of Life Insurance, Part 1 - Types of Life Insurance

| October 03, 2017
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Episode Summary

In part 1 of this seven part series on the Basics of Life Insurance, Paul sits down with Cory Shepherd, President of Sound Financial Group and author of Cape Not Required, to discuss two different types of life insurance - term and whole life.

What Was Covered

  • 05:42 - How does life insurance work?
  • 08:02 - Cory explains what a death benefit is
  • 08:36 - Cory defines cash value and premium
  • 09:36 - What term insurance is and how it works
  • 10:34 - Purchasing a death benefit
  • 12:03 - What happens after a 20 or 30 year term life policy?
  • 14:57 - Paul explains return of premium in a term insurance policy
  • 16:23 - The problem with return of premium
  • 19:00 - Whole life insurance - how long does it last
  • 20:07 - Paul explains the guarantees in whole life insurance policies
  • 22:26 - The benefits of whole life insurance
  • 24:33 - A few differences between whole life and term insurance
  • 26:12 - The problem with whole life insurance


"A very, very small amount…less than 2% or less than 1% of all term insurance actually results in a claim."

"You can pay more in premiums than you have in death benefit if it continues beyond the term."

"The life insurance company needs the term to expire before your life expires."

"Everybody who cancels their policy in less than X percent of time never sees the benefit of the return of premium."

"The reason people acquire term is because they need a low entry point from a cash flow perspective."

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