If protecting your love one’s is a priority to you then it’s important to know your options and how life insurance works. We are not high pressure life sales people. We care enough to ask and to educate so know your in a safe zone. Ask yourself these questions to help gauge your needs:
Do you have life insurance?
If you answered yes, that’s great! Keep going though….
Do you have enough life insurance?
(do you know what is enough??) See below for a great tool to help determine your need.
Is your life insurance through your employer?
If yes, that’s great and means it’s probably affordable, however, you need to find out if the insurance can be taken when you retire or leave the employer.
What do you have in place away from work?
This is key. It’s important to have insurance away from your employer. You should have at least 1 separate policy since most policies cannot be taken away from the group plan. Life insurance is priced based on your age. It’s best to purchase it when your young if possible and of course before you have any medical issues since those can effect rates as well.
Definitions:
Term Insurance
- Lasts for a period of time then expires (5-30 years)
- Once it expires you can renew most times but at your new age not your initial purchase age…ouch!
- Can be a lot more affordable
- Serves a great purpose for covering those bills that will dissolve in the future (car loans, home loans, education expenses for the kids, etc)
Whole Life Insurance:
- Lasts a lifetime
- Grows cash dividends
- You can take money out of the policy if ever there is a need
- Great partnered with a term policy
Universal Life Insurance:
- Lasts a lifetime
- Very flexible-you can skip payments even (restrictions apply)
- Grows cash dividends
- You can take money out of the policy if ever there is a need
- Great partnered with a term policy
How we figure out your life insurance needs. (You can do this yourself)
Use the acronym L.I.F.E. to work out your need.
L (loans: car loan, student loans, home loan, credit card debit) $__________________________________
I (income: if you were not there tomorrow how much of your income would your spouse or family need to keep up the same lifestyle? To keep the kids in the same home, same school district? So think percentages here. For example they would need 50% of my pay for say the next 10 years. That would cover the kids being home until 18. $___________________________________
F (final expenses: burial expenses, final medical bills. The average burial expense is $15,000-$25,000. What will it look like in the years to come is a hard prediction so I always lean on the higher side to add that protection $_______________________
E (education expenses: if sending your kids to college is important to you then adding funds for educational expenses is important. The average college with a dorm is $25,000 per year. Now do you can definitely plan on scholarship money as well) $_________________________
Now from here total everything up
Now deduct what you have in place (congratulations!)
What’s your total need: $__________________________
Don’t panic if the amount is high. Now remember, there are options and not all of these life needs are for your whole life. Like I mentioned above, some debt falls off and kids will grow up so educational expenses may not be a factor. Let’s review this together and we can work on a plan and some quotes. We get insurance for our cell phones, so why not protect your most valuable possessions, your family!