Life Insurance

"Although thinking about life insurance may be something you want to avoid, selecting the right policy is critical to help protect your family’s financial well-being."

At some point in your life, you will probably be faced with the question of whether you need life insurance. Life insurance is a way to protect your loved ones financially after you die and your income stops. The answer to whether you need life insurance depends on your personal and financial circumstances.

Do you need life insurance?
You should probably consider the following when making your decision:

Are you married and your spouse depends on your income?
Do you have children? If so how many and what are their ages?
Do you have an aging parent or disabled relative who depends on you for support?
Will your retirement savings and pension be enough to support your spouse?
Do you have a large estate and expect to owe estate taxes?
Do you own a business and do you have a partner?
Do you have a substantial joint financial obligation such as a personal loan for which another person would be legally responsible after your death?

In all of these cases, the proceeds from an insurance policy can help your loved ones continue to manage financially during the difficult weeks, months, and years after your death. The proceeds can also be used to meet funeral and other final expenses, which can run into thousands of dollars.

If you're still unsure about whether you should buy life insurance, a good question to ask yourself is: If I died today with no life insurance, would my family need to make substantial financial sacrifices and give up the lifestyle to which they've become accustomed in order to meet their financial obligations (e.g., car payments, mortgage, college tuition)?

Remember, when it comes to life and death, men and women are not created equal. Couples should take this into consideration when evaluating the need for life insurance.

Periodically Review Your Coverage
Once you purchase a life insurance policy, make sure to periodically review your coverage--especially when you have a significant life event (e.g., birth of a child, death of a family member)--and make sure that it adequately meets your insurance needs. The most common mistake that people make is to be underinsured. For example, if a portion of your life insurance proceeds are to be earmarked for your child's college education, the more children you have, the more life insurance you'll need. It's also possible to be overinsured, and that's a mistake, too--the extra money you spend on premiums could be used for other things. If you need help reviewing your coverage, contact your insurance agent or broker.

At BNB Wealth Management, LLC our relationship with many of the top rated insurance companies allows us to assist you in planning for future asset and estate protection.

Content Courtesy of Forefield Inc.