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Nashville & Life Insurance – A Long History
Most people don't realize it, but Nashville, Tennessee and life insurance have always had an important relationship. This unique relationship between "Music City" and insurance began with the National Life and Accident Insurance Company. A life insurance company that was based in Nashville. This company was also one of the forerunners in developing a wide variety of life insurance policies, many of which are still offered today by many major life insurance companies.
The History of Life Insurance in Nashville
The National Life and Accident Insurance Company began in 1900 as a company called the National Sick and Accident Association. The company later adopted the name National Life.
In the early years of the company, they offered low-premium, low-benefit policies that were referred to as "sick and accident" policies. These policies were a form of disability insurance. The policy paid a weekly benefit to the owner of the policy while they were unable to work due to injury or illness.
Later, the company expanded to a form of life insurance they called "industrial life insurance." The insurance policies were aimed at the industrial workers in Nashville and other cities. Later, the company expanded its life insurance options even further with "ordinary life" insurance for bankers, accountants, ministers and middle class office workers.
In the mid-1960s, it was time for the Nashville life insurance company to expand. They built a new home office location across the street from the Tennessee State Capitol. In the 1970s, the company made another development in life insurance. Instead of paying weekly premiums, they multiplied the weekly premium amount by 4.3 and the premium then became a monthly payable premium for life insurance coverage.
At the same time of the National Life and Accident Insurance Company was located in Nashville, another life insurance company called Nashville home as well. The Life and Casualty Insurance Company of Tennessee was founded in 1903 by the great-grandfather of singer Amy Grant, A.M. Burton. The life insurance company sold policies very similar to those of National Life and Accident Insurance Company. The offered industrial life insurance as well as ordinary life insurance. The company was sold to the American General Insurance Company of Texas in the mid-1060s.
What Types of Life Insurance are Available Today?
There are four major types of life insurance available today. It is important to remember that the definitions of these policies may vary from company to company. Whether you live in Nashville or another city in the United States, life insurance is an important decision to make, so be certain that you understand the differences in life insurance policies before you sign a policy.
Term Life Insurance - This type of policy is the simplest form of life insurance. You purchase life insurance coverage for a specific time period and for a specific price. If you happen to die during that period, your beneficiary will receive the value of that policy. There is no investment component to be made in this type of policy.
Whole Life Insurance - Whole life insurance is not for a specific "term." This policy has a premium that remains level throughout the entire life of your policy and the company will invest a portion of the premiums you pay. Some firms will share the investment proceeds with their policyholders in the form of dividends.
Universal Life Insurance - For this type of policy you decide how much you want to put into the policy over the minimum premium. The company will then chose an investment vehicle, such as bonds or mortgages, for you to invest in. The investment and the returns go into a cash-value account. This account can be used to pay the premium or to grow in value. There are several different varieties of these life insurance policies available.
Variable Life Insurance - There is a wide assortment of investment products available for variable life insurance policies. These include mortgages and bonds, as well as stock funds. These policies are similar to the universal life insurance policies in that they off returns on your investments which can be used to pay your premium or to build-up in an account. Depending on the type of policy you choose, the beneficiaries will receive either the face value of the policy or the face value plus the cash account.
How Much Life Insurance Do You Need?
The purpose of life insurance is simple. It's designed to take care of your dependents after you've passed on. It's a very important aspect of your financial plan, whether you live in Nashville or elsewhere. But the main question that everyone seems to wonder is - how much life insurance do you need?
The best way to determine how much life insurance you need is to look at your income and how much money your family lives on in Nashville. By taking a snapshot of your family's lifestyle and financial needs, you should be able to take an educated guess on how large of a policy you will need as well as what type of policy you will need.
Determining how much life insurance you need depends on your life. For instance, if you live in Nashville, do you own your home? How much income do you earn? Do you have college tuition to pay for? Would your working spouse need to take time off to spend with the kids if you were to pass? Or, perhaps one of you is a stay-at-home parent? What would it cost to ensure that person is able to be provided for if their provider were to die?
Also, you need to look at your life. If you're at or near retirement, how would your income change if you lost your spouse's income or if you can't yet access a pension or retirement savings plan? All of these questions come into play when you're trying to determine how much life insurance you need.
Once you have an idea of how much you'll be replacing in terms of income, then you can determine the size of the policy you need. For instance, if you are going to try and replace a $50,000 annual income, you would need a $1 million policy. Why? You need to get at least a 5% return on your investment. If you need to cover more than your annual income then you can adjust that amount accordingly.
Life in Nashville
If you're living life in Nashville, then you want to make the best of it. Nashville is a busy city and if you love music, then you're obviously going to be right at home. Nashville features some of the most unique attractions from the Grand Ole Opry and the Country Music Hall of Fame to the Nashville Zoo at Grassmere to the Tennessee Titans. There is literally something for everyone to see and do in Nashville, no matter how old or young you are.
Nashville also features some of the best concerts in the country. Each year there are hundreds of great music artists coming through to either make it big in Nashville or keep their careers alive. Either way, if you love music you're going to be able to find a concert just about every day of the week.
