Using Life Insurance To Jump-Start Your Financial Future

By: Peter Ikre

This article is the first in a series of reports on financial planning intended to familiarize the immigrant communities and the general public on the need to develop the right mind-set and take advantage of the numerous opportunities to establish for themselves and their families a secured and guaranteed financial future. However, it begins with immersing oneself with the right information and taking adequate steps to become a beneficiary of the process. According to a popular adage: “Knowledge is power”. Another widely recited mantra goes thus: “We fail not because we plan to fail rather we fail to plan”. My mission in the next couple of weeks is to inundate you with so much relevant information to make you believers in your financial destiny. To begin the process, let’s acquaint ourselves with an acronym known as PAD (Protection, Accumulation, and Distribution). The key to any financial planning process starts with protecting yourself and family in the form of medical insurance, disability, long-term care insurance, and life insurance. Without these basic protective tools, there is no way one can confidently advance to the second and third categories (accumulation and distribution respectively). In this section, I’ll deal with life insurance as it represents an indispensable part of any bona-fide financial planning arrangement.
There are certain misconceptions about life insurance in the immigrant communities particularly those of African origin. Some people mistakenly believe that possession of a life insurance policy is an invitation to doom or negativity in one’s life. They can be forgiven because such thoughts emanate from an ignorant mind-set. Sometimes, we marvel at the successes of other ethnic/racial groups such as the Jewish, Chinese, and Indian communities. Nonetheless, we are not prepared to do what it takes to arrive at the promise land. The tools are available for all to use. One of the major reasons for having life insurance is to fill the void caused by death or disability, especially if you support a family, run a household, pay a mortgage, and plan to send kids to college (Morris & Morris, 2004). Life insurance is not limited to the family man or woman as singles equally have insurance needs appropriate for their situation. The basic function of insurance is to protect against known and unknown risks to assets, property, and life. For the sake of simplicity, there are basically two types of life insurance: a) Temporary and b) Permanent


Generally, tax-free death benefit
Basic protection for a fixed period of time
Initially, the lowest cost alternative
Renewable at the end of term or upgradable to permanent
No cash value
Generally, tax-free death benefit
Coverage never expires as long as premiums are paid
Level premiums over the life of the policy
Tax-deferred cash value accumulation
Access to cash value tax-free

I’ll elaborate on these types of life insurance in the next article.

Morris, K. M., & Morris, V. B. (2004). The Wall Street Journal guide to understanding personal finance (4th ed.). New York: Lightbulb
Press, Inc.

Dr Ikre can be reached at
at Investigroup, Inc. located at 1282 Liberty Avenue, Hillside, NJ. 07205 (Telephone: 908 688 4778;
Fax: 908 688 7178.

Posted by on Aug 14 2015. Filed under Community News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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