R&R Insurance Blog

If you died tomorrow, how would your loved ones fare financially? It’s not a pleasant scenario to think about your own death, but not doing so can have serious consequences.

If someone depends on you financially, you need life insurance. It’s that simple. Unfortunately, roughly 70 million adult Americans have no coverage at all, and most of those who do have far less coverage than financial experts recommend. Life insurance provides cash to your family after your death. Known as the death benefit, it can help your family pay for the funeral and other final expenses, eliminate credit-card balances and car loans, and provide loved ones with income to live on for a period of time. Whether a person needs life insurance depends on his or her particular situation and financial objectives. Coverage needs to be an important consideration for the following scenarios:

1. You’re Married. Married people share a life with one another, but also share financial obligations. If you died suddenly, would your surviving spouse have enough money to pay for your final expenses and buy time to adjust to a new way of life? Life insurance can help ensure that these financial goals will be met. Life insurance can be considered mortgage protection. Protect your spouse's ability to keep the home that you live in. Life insurance would offer the funds necessary to keep the home and the mortgage intact.
2. You’re Married With Kids. Having kids is the most obvious reason to own life insurance. If you and your income were suddenly gone, would your spouse and kids be okay financially? Life insurance helps replace lost income to help make sure those who depend on you will be provided for, no matter what life throws your way.
3. You’re a Single Parent. As a single parent, you're the caregiver, breadwinner, cook, chauffeur, and so much more. You need to make doubly sure that you have safeguarded your children’s future in case you are no longer there to care for them. Make sure you have enough life insurance and designate who will take care of your children in case the unthinkable were to happen.
4. You’re a Stay-at-Home Parent. Just because you don't bring home a paycheck doesn't mean you don't make contributions to your family that would be expensive to replace. If you were no longer there, could your spouse afford to pay someone to provide the childcare, transportation, cleaning, cooking and other household responsibilities that you handle every day?
5. You’re Approaching Retirement. The kids may be gone and the mortgage paid off, but that doesn't mean Social Security or your savings will necessarily take care of everything that lies ahead. If you died tomorrow, would your financial strategy, without insurance, enable your spouse to maintain the lifestyle that the two of you worked so hard to achieve?
6. You’re a Small Business Owner. Life insurance can help protect your business in a number of ways in the event you, your partner, or a key employee dies prematurely. A buy-sell agreement funded with life insurance allows surviving business owners to buy the company interests of a deceased business owner at a previously agreed-on price. Key-person insurance can provide business owners with the flexibility to hire a replacement when the key employee dies.

You can get a general sense of your life insurance needs by going to www.lifehappens.org/lifecalculator and using the online calculator offered by the LIFE Foundation, a nonprofit insurance education group. Or, you could contact me and we can have a quick discussion to help you determine the right coverage for you and your family or your business - products that fit your lifestyle and your budget.

If people depend on you financially, (i.e. mortgages, schooling, child or parental care) life insurance is an absolute must, and no one should pay more than they have to.

Over the past few years we have become accustomed to spending less and saving more, due to the economy. Even as the economy rebounds, many people continue to look for ways to keep their household budgets in check. Luckily, spending less doesn’t have to mean doing with less, especially when it comes to life insurance coverage. There are ways you can maintain your coverage, but pay less for it.

Life insurance is a financial safety net for your loved ones, so it’s critical to maintain that coverage especially with the uncertainty that remains in the economy. However, keeping that coverage doesn’t have to be a financial burden.

There are ways to save money on your existing coverage, and I’ve got some tips to help you do just that.

1. You’re healthier. If you have quit smoking, lost a substantial amount of weight or made significant improvements to your health, let your insurance company know. You may be able to qualify for a lower rate on your coverage.
2. Rates are near historic lows. Life insurance rates remain near historic lows. In fact, the cost of basic term life insurance has fallen by nearly 50 percent over the past decade. So if your family’s budget is tight and your health status hasn’t changed much since the time you last purchased coverage, you may want to apply for a new policy. If you do, make sure not to drop your current coverage until the new policy is in force.
3. Circumstances have changed. It is smart to review your policy every year to make sure it’s adequate and up to date. If the kids are out of the house, your mortgage is paid down, you’ve gotten divorced or family members no longer need your financial support, your need for life insurance coverage may have decreased. A smaller face amount policy will likely save you money.

For more information about life insurance, estate planning, business continuation and annuities, contact knowledgebroker Tom Driscoll.