Most people understand the importance of life insurance. However, this is something you may not wish to think about. After all the subject of death is never pleasant but one must make the proper arrangements to take to take care of family should this time happen. To help make the right decision it’s important to seek an experienced financial service professional to provide and explain all the options available.
Most financial experts consider life insurance to be the cornerstone of sound financial planning. It can be an important tool in the following situations:
1. Replace income for dependents
Your family depends on your income, life insurance can replace that income for them if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, siblings or adult children who continue to rely on you financially. Insurance to replace your income can be especially useful if the government- or employer-sponsored benefits of your surviving spouse or domestic partner will be reduced after your death
2. Pay final expenses
Life insurance can pay your funeral and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insurance.
3. Create an inheritance for your heirs
Even if you have no other assets to pass to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries.
4. Make significant charitable contributions
By making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policy’s premiums.
5.Create a source of savings
Some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner’s request. Since most people make paying their life insurance policy premiums a high priority, buying a cash-value type policy can create a kind of “forced” savings plan. Furthermore, the interest credited is tax deferred (and tax exempt if the money is paid as a death claim).
A Safety Net for Your Loved Ones
If you are planning your family’s future, considering a life insurance policy is a crucial step in the process. Having life insurance can provide an important safety net for your loved ones and fulfill your obligations to your family if you are no longer living. There is an extensive range of benefits that come from having the proper policy in place. It can be used to cover things such as your children’s education expenses, funeral and burial expenses, debt repayment, estate taxes, and other expenses that survivors may incur.
One of the biggest benefits is the replacement of your lost income for your family. We do a thorough analysis of your financial health and present the best options for you and your family. Life insurance will help ensure your family’s standard of living is maintained. It can also ensure that your wishes are carried out and your family business is passed on to the intended survivor.
Who Needs Life Insurance!
Whether you are the head of a family, business owner or caretaker for someone, you may want to make allowances for these people if you are not there anymore. In addition, using insurance plans are a way to take care of business partners or making sure your final expenses are not left to your family.
Here are some of the people who should consider insuring their lives:
- Foster Parents
- People with major financial obligations
- Businesses with partners
- Corporate executives
- Business owners taking out significant loans
How Much Life Insurance Should I Own?
One of the most important questions clients always ask is how much life insurance should I own. The simple answer is, it can vary widely from person to person. To determine the correct amount, it is important to consider such factors as regular income, income other than salary or earnings, marital status, number and age of dependents, whether special life insurance needs exist, and more. A rough “rule of thumb” that is often used says the policy should be equal to 6-8 times the amount of the individual’s annual earnings, but that can easily increase to 10-20 times annual earnings based on those other factors.
Act Now to Ensure Your Family Is Protected!
Mark can help you sort through all the various factors that determine what type of policy to purchase and in what amount. By acting now, you can protect those you care for most, should the unexpected occur, and ensure they are well taken care of far into the future. It is prudent to re-evaluate your life insurance policies annually or when you experience major life event like marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business.
Creative Life Plans offers a variety of life insurance policies, including but not limited to:
- Term Life
- Whole Life
- Universal Life
- Indexed Universal Life
- Guaranteed Universal Life
- Final Expense Life