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Life Insurance

Why do I need life insurance?

The main purpose of life insurance is to provide cash to your family after you die. The money your dependents will receive (the “death benefit”) is an important financial resource: It can help pay the mortgage, run the household, and ensure that your dependents aren’t burdened with debt. The proceeds from a life insurance policy could mean that they won’t have to sell assets to pay outstanding bills or taxes. What’s more, there is usually no federal income tax on life insurance benefits.

Where do I begin?

Start by evaluating your family’s needs. Gather all your personal financial information and estimate what your family will need after you’re gone. Include ongoing expenses (such as day care, tuition, or retirement) and immediate expenses at the time of death (like medical bills, burial costs, and estate taxes). Your family also may need funds to help them readjust… perhaps to finance a move or pay expenses while job hunting. Remember, life insurance provides financial protection. If protection is not your primary goal, you should consider other financial products.

How much life insurance will I need to purchase?

While there’s no substitute for evaluating needs, one rule of thumb is to buy life insurance equal to five to seven times your annual gross income. Why five to seven? When determining insurance coverage, think about the total impact you are planning for. This includes a loss of current income as well as retirement savings, and payment of outstanding debts such as mortgages, car loans, etc.

Contact us for an insurance quote or review.