If there is anyone (children, spouse, parents, etc.) that depend on your income for their financial needs, you should seriously consider purchasing life insurance.
Most of the time, if you are not independently wealthy, you will need life insurance.
Life insurance is not a set it and forget it process. You should constantly be evaluating if you are under or over insured. Before or after big life events is the most common time people start thinking about life insurance. Contact us today and we can do a free evaluation.
Term life insurance:
If down the road, you know that you will be financially independent, that no one will be dependent on you financially (e.g., children are grown up and have their own jobs), or that your current financial needs are temporary (mortgage payments, loan payments, etc.) then term life insurance is right for you.
Term is relatively inexpensive and will protect you and your family from unnecessary financial hardship should you die before all financial obligations are paid off. In addition, it also guarantees your family a payment or income to cover living expenses in your absence.
Permanent life insurance:
If you are planning long term financial needs such as estate planning or wish to leave a legacy to your family regardless of when you pass away, then permanent life insurance would be the right choice for you.
You can also consider permanent life insurance to be a safe and productive option, as these policies build cash value (aka cash surrender value) and grow in value. They do not lose value due to poor economic market performance. You can also redeem or borrow against this cash value.
Many experts say that you should purchase a policy that is 8-10 times your annual salary. However, you should consider two important factors in deciding how much life insurance to purchase:
If your life insurance policy can both cover all your financial obligations should you die and also replace your income for a set period of time, you can be assured that your family will do well financially after you have left this world.
If you are considering a term life insurance plan, you should consider coverage for as long as it will take for you to become financially independent. This includes:
In order for benefits to be paid out, your insurance company should be a secure and stable financial institution. When shopping for insurance, look at the insurance company’s financial ratings, which are graded on an A+/B- scale similar to school grades. The best life insurance companies will be rated A+ and should be considered a solid and secure choice to purchase a policy from.
Companies such as Standard & Poor’s, Moody’s, and Fitch evaluate and rate these life insurance companies based on their financial strength, operations, and performance in the market.
Temporary coverage exists to cover a potential policyholder during the life insurance application and underwriting process.
Many companies will allow an individual to pay the first month’s premium with his or her life insurance application submission. Note that this is not required or mandatory. This will guarantee that an individual’s dependents are protected financially should the individual die before the policy is issued.
It is generally recommended you get temporary coverage to mitigate any risk.
If your family relies on both you and your spouse’s income to live and the loss of your spouse would cause financial strain to your family or any other dependent, then yes, your spouse needs life insurance!
A sudden loss of a spouse would result in unmet needs, whether your spouse was helping raise the children or managing expenses. You may need to take time off from your own job or hire someone to help you tend to these responsibilities.
Having a life insurance policy for your spouse would help your family with more than just replacing income. Having those benefits could also give you flexibility to take time off of work and care of the unforeseen responsibilities in wake of the unexpected loss of your spouse.
Mon-Fri 8am-8pm & Sat 8am-1pm, Central Time
We want to provide you the best advice to protect you, your family and your business.