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Your life insurance policy is an important part of your financial plan because it protects your loved ones when you no longer can. Our financial advisors focus on creating a comprehensive financial plan for your situation, and for most people, that includes life insurance.
We don’t like to think about death, but when your family depends on your income, you must take precautions. Purchasing a life insurance policy will not affect how soon you die, but it will protect your family if that unfortunate event happens before they’re financially ready. Without life insurance, your family may struggle financially or even deplete savings that were earmarked for retirement. Even if you’re not the only wage earner in the family, an unexpected death can wreak havoc on the finances. There are funeral costs to think about, debts that may need to be paid off, and covering the living expenses on the remaining salary. Maybe your family even loses health insurance benefits they had through your employer. Life insurance helps with all these unexpected additional expenses.
Permanent and term life insurance both include a death benefit. Term life insurance is usually limited to a term of 10 to 30 years. Term life is an affordable way to protect your family while your dependents are still young and need your financial support. You can cancel your term life insurance policy at any time, but it doesn’t have any cash value. Permanent such as whole life, universal life or variable life insurance includes a cash value component and a death benefit. Over time, the permanent life insurance policy builds up more value. Permanent life insurance is more “expensive”, but you can keep that policy for as long as you want. You can even borrow against the cash value of it or withdraw some of the money to pay the premiums and keep the coverage.
The goal of your life insurance is to protect your family. How much life insurance you need depends on your financial situation. If you have significant assets and another wage earner in your family, you won’t need as much of a life insurance policy as the sole wage earner with young children. Life insurance should cover funeral expenses and help cover any debts that need to be repaid. To determine an ideal policy amount, you may want a multiple of your annual income to help support your family for the first few years without you. If possible, you can get a policy that supports your kids until they’re old enough to support themselves. You always have the option to supplement your permanent life insurance policy with term life insurance to better provide for your loved ones.
Do I Need Life Insurance?Life insurance is there to protect your loved ones financially if something happens to you. There’s a good chance you can benefit from life insurance, especially if you don’t have significant assets and are one of the primary wage earners in your family.
Can Life Insurance Build Value?Yes, permanent life insurance includes a cash value portion that can grow over time. You can borrow against it and even make withdrawals. However, this may reduce the death benefits the policy offers.
How Much Life Insurance Do I Need?We can help you calculate how much life insurance you need. You want to care for your loved ones as best as you can, especially if they rely on your income and employer benefits for support. You can get affordable term life coverage or permanent life insurance as another asset.
If you don’t have a life insurance policy or need to make adjustments to yours, we’re here to help. Life insurance is an important part of your financial plan, designed to protect your family if something happens to you. Call our team to find a life insurance policy that works for your situation.
Along with life insurance, disability insurance is also an important part of your financial plan. Click here to learn more about disability insurance.
Life insurance should be purchased by individuals that have a need to provide a death benefit to protect others with insurable interests in their lives against financial loss. Life insurance is not a retirement plan, investment, or savings account.
Withdrawals and loans from a life insurance policy reduce the death benefit and cash value, may increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.