Most people are familiar with whole life insurance and that it can help to leave a financial legacy for beneficiaries. Experienced Financial Advisor, Donald Dirren, says there is an affordable alternative to whole life that is affordable and protects family assets and lifestyles.

That alternative is term life insurance. As the name suggests, term life insurance is in effect for a specific period of time or a “term.” Once that time period has expired, so does the life insurance policy.

1. Protect Family Against Sudden Loss of Income

Don Dirren says term life will produce a significant payout that is based on the amount of coverage that you obtained. If you should pass on while the term life policy is in effect, the insurer will pay the insured amount to your chosen beneficiaries.

That payout can help to protect your family’s assets and prevent a significant change in their standard of living if you are the primary source of income for your family.

2. Pay for Medical Bills and Funeral Expenses

Term life is especially useful for paying off short-term financial obligations if the insured person should die while the policy is in effect. Those short-term obligations might include medical bills and funeral expenses that other insurance policies do not cover.

3. Mortgage Protection for Your Home and Properties

Many people buy homes and other properties with mortgages that require payments over many years. Donald Dirren notes term life is a terrific financial tool for protecting those financial obligations and ensuring those debts are paid if you die unexpectedly. You can buy a decreasing term life policy whose coverage amount and cost decrease as your debt gradually becomes less and less.

4. Ensure Children’s College Tuition and Costs

If you have children who are enrolled in college or plan to enroll, term life can ensure the tuition is paid if you are no longer around. Term life is an affordable way to ensure your children’s educational future.

5. Protect Family Assets and Businesses

Term life helps to ensure your family’s assets remain in the family upon your passing. Instead of forcing a sale of assets to raise funds, your family can hold onto them and continue to benefit from owning them.

Why Term Life Is Preferable to Whole Life Products

Term life does not come with a guaranteed payout like whole life insurance. Instead, it exists for as long as you need to protect certain financial obligations, like a home mortgage, protecting business assets, or ensuring your children’s college tuition is paid if you should pass on unexpectedly.

Term life also is much easier to obtain than whole life insurance because the policyholder does not have to undergo medical examinations. Because there is no guaranteed payout, insurers are more willing to underwrite coverage and charge less. That makes term life insurance a very smart investment for protecting financial obligations that eventually will not exist after a period of time, such as a home mortgage. 

 When implemented correctly, mergers and acquisitions (M&As) can be beneficial. To get it right, you must know how to handle the complexities. Paul Inouye, an investment banker, says that’s where good corporate governance comes in. He emphasized that properly managing an organization’s internal structures and processes is vital to successful M&As.

Proper governance makes it easier to form a new entity the right way. That way, everything falls into place. Policies, competencies, and procedures align seamlessly, ensuring a smooth merger. The best part about effective corporate governance is that you won’t struggle managing risks.

On top of that, it helps you comply with regulations while running the business more efficiently. It also ensures successful outcomes by focusing on shareholder value. With all these ducks in a row, maintaining continuity between the two companies is a breeze. Best of all, there’ll be transparency and effective communication.

So, what’s the best way to approach mergers and acquisitions? Here are the things Inouye says you should do.

Understand the organization better

It’s common for entities with different yet complementary characteristics to join forces. One organization may do things centrally while another spreads things around. Because of this, Paul recommends learning as much as possible about an entity’s regional variability.

Familiarize yourself with its processes and structures at a granular level. While you’re at it, get to know how both companies organize and manage critical data. This information includes products, customers, and locations.

Come up with good communication strategies

For an M&A to work, there’s a big need to define how various structures interact and share information. Inouye says this bit is super-important because the information isn’t always readily available or known. That’s why it’d be best to provide information kits. Doing so makes everyone’s job so much easier.

The last thing you want is to create information gaps that cause confusion. On the other hand, a good communication plan ensures that collaboration and productivity kick into high gear early on.

It’s vital that the communication kits indicate how the merger boosts both entities’ fortunes. The two organizations could benefit by improving the ease of doing business, cost savings, and a bigger portfolio. You can motivate employees by highlighting what kind of career development opportunities will arise.

Also, indicate the merger’s scope and schedule. At the same time, don’t forget to keep technology vendors and other stakeholders in the loop. That way, everyone understands the impact of changes and what’s expected of them.

Harnessing transformational value

Although it’s given that an M&A brings value to both entities, it’s best to maximize benefits by harnessing the combined resources. Paul says you must find ways to make the most of cost reduction and operational efficiency. So, look at the technology, skills base, and processes at your disposal.

Use these assets to increase the overall competitiveness and market share. If you do things right, getting new customers that were out of reach before the merger should be easier. Meanwhile, technological assets provide a surefire way to make things run more smoothly, boosting productivity. As a result, the business expands more rapidly in existing and new markets.

What’s more, your offerings may increase based on the other entity’s product or service suite.

About Paul Inouye

Paul has an MBA from The Wharton School at the University of Pennsylvania who ks based in Portola Valley, CA. He’s an investment banker who understands the importance of embracing M&A best practices for a successful outcome. Outside of work, he enjoys cycling, cross fit and travel.