What exactly is “Executive Protector” insurance, and is it really worth it?
A while back, my father-in-law purchased a $25,000 policy through State Farm known as “Executive Protector.” He has since transferred the policy to my wife, who is now responsible for the annual premiums of $110. However, we still have some questions about what the policy entails and whether it’s beneficial for us to maintain it.
“Executive Protector” insurance is a specialized type of life insurance policy offered by some insurance companies, including State Farm. It typically provides a death benefit and may also include features like cash value accumulation and other benefits that cater to individuals in high-net-worth or executive positions.
In assessing whether it’s worth it to keep the policy, here are a few factors to consider:
Death Benefit: The primary purpose of life insurance is to provide financial protection to beneficiaries in the event of the policyholder’s death. Evaluate whether the $25,000 death benefit is sufficient for your family’s needs.
Policy Type: Determine if it’s a term policy (which provides coverage for a specific period) or a permanent policy (which offers coverage for the insured’s lifetime and may build cash value). If it’s a term policy, check when it expires and consider what happens after that.
Cash Value: If the policy accumulates cash value, it can be borrowed against or withdrawn, which might make it more valuable. Assess how much cash value has built up and whether it could be beneficial for your family’s financial needs.
Premium Costs: The yearly premium of $110 is relatively low for a life insurance policy. Compare this cost to the death benefit and consider if it fits into your overall budget and financial plans.
Future Needs: As life circumstances change (like income, dependents, etc.), your need for life insurance might change. Consider whether this policy still meets your family’s financial goals.
Alternatives: Research other life insurance options available on the market and get quotes. This can help determine if it makes sense to keep the current policy or switch to a different plan.
Consult an Expert: If you’re still unclear, speaking with a financial advisor or insurance agent can provide personalized insights based on your family’s financial situation and goals.
In summary, whether to keep the “Executive Protector” policy ultimately depends on your family’s specific needs, financial situation, and the overall benefits offered by the policy.