Ever wonder “Do I need life insurance?”
While every estate plan should have a Will, Durable Power of Attorney, Living Will and Health Care Surrogate Designation, similarly, an essential element of every financial plan includes life insurance. Many times, people are not sure how much life insurance coverage they actually need. And often, people fail to have their policies reviewed every couple of years to make sure that what they have is still what they need. Are they paying too much for coverage? Do they have enough coverage? Do they have the right kind of coverage?
How much life insurance one needs often times depends on what stage of life you are in (which is very similar to estate planning – what we need depends on what stage of life we are in). For instance, when you are young (even before you turn 18), parents can purchase life insurance for their children that can grow with the child. Usually, life insurance is used to cover final expenses or replace lost income (which a child does not normally have to replace), but permanent life insurance such as whole life or universal life can help a child build tax-deferred cash value which can be used later on in life to pay for things such as college tuition or a down payment on a home. Additionally, we don’t have a crystal ball and we do not know what sorts of illnesses our children could develop later in life, so buying insurance while they are young ensures that they will have coverage later in life.
When you are a little older, perhaps after you’ve gotten married and begun to start a family, insurance is important to support your family if something should happen to you. Typically, younger people buy term insurance which provides coverage for a certain period of time or a term of years. These types of policies are usually inexpensive ways to insure that a family has something if the main support person passes away.
Essentially, you buy life insurance to protect your family – to make sure that mortgages can be paid off if you are no longer there to provide income to the family, to make sure that funeral expenses can be paid, and to provide a safety net for children (or for your beneficiaries). Nobody wants to think about their demise, but everyone, at some point has to face it. Making sure that your family is protected and has peace of mind makes it a little easier to face.
To schedule a complimentary phone consultation with Attorney Laurie Ohall, please contact her office at 813.438.8503.