Life Insurance Planning

How will my family survive should I die early? 

We never think that death will happen early. For parents with young families, life insurance is a serious need that is all too often neglected. Should you die early and not have enough life insurance, the fact is that your family will grieve not only the loss of your life, but also the loss of the lifestyle they once enjoyed. There are many crowd funding sites to help pay for sudden and unexpected losses, but we can all agree that no one wants to rely on the charity of others, especially if it ca be prevented. 

How much would my family lose if I were to die early?

There many ways to calculate the amount of life insurance that you will need. Taking income, debt, mortgage and education into consideration is a good starting place to think about how much life insurance you will need. 

How long will my family need to survive if I were to die early?

How long a death benefit will be needed to support a family is one of the most neglected parts of life insurance planning. A life insurance benefit should take long time financial goals into consideration, including retirement. Just because the kids are grown doesn’t mean that a spouse will not have a need for financial support in the event of your death. 

Different Types of Life Insurance Serves Different Purposes

Life insurance is the foundation of any financial plan. Many put off getting a life insurance policy or do not understand the extent of their risk and are under insured. Most people with a life insurance policy need more life insurance. It’s easy to misjudge the amount of money your family would need to keep their lifestyle in the event that they were to lose you. 

Not all policies are the same and chances are you should have multiple types to help you build wealth. 

Term Insurance

Term insurance is ideal for those with a large temporary risk. Term insurance can be relatively inexpensive for a large amount of death benefit. Term insurance is usually available in increments for 10, 15, or 20 years.

Whole Life Insurance

Life insurance shouldn’t only be thought of as something that someone else gets when we die. A life insurance policy is needed by most Americans even after their children are grown and out of the house. Life insurance can replace lost social security income be a way to leave a tax free estate to the next generation or the insureds favorite charity. 

However, permanent life insurance has tremendous benefits that can enjoyed throughout your life. For example, permanent life insurance has the power to fund major purchases such as a car, a down payment on a home, weddings, vacations and so much more. In fact, a whole life policy can even provide resources for your long term care needs. 

Indexed Universal Life

Indexed Universal Life insurance is a blend between term and whole life insurance. If funded correctly, an indexed universal life will provide a death benefit for your entire life. The cost of insurance will increase each year, but the upside of the cash value has the potential to grow much more quickly than a whole life policy. The cash value returns track a market like the S&P 500, but are capped at a ceiling rate. However, on the flip side, the cash value will not go negative in years where the market returns are down. 

These types of policies have some flexibility but again require a competent advisor to closely monitor their progress.