One minute you’re tooling down the sidewalk as you scroll through your phone looking for that important text message from yesterday… the next minute, WHAM! You’re broadsided as you absentmindedly step off the curb into the path of Bicycle Messenger Guy. Thank goodness it wasn’t worse, but one thing is certain: life is unpredictable.
September is Life Insurance Awareness Month. Life insurance plays a critical role by potentially providing protection from the worst-case scenario. And yet, life insurance remains a mystery to many Americans. One study by JD Power found the percentage of Americans who own a life insurance policy is declining. These households could be financially devastated if a loved one passes away.
At its most basic, life insurance is intended to offset the financial impact your death may have on the lives of your dependents. Monetary consequences such as funeral charges, medical bills, taxes, debts, and professional fees for attorneys or accountants are just a start. Or the impact may be more significant: what if you’re a stay-at-home parent whose children depend solely on a spouse’s income for all of their day-to-day needs?
So how much life insurance do you need? That depends on your circumstances, your stage in life, and your future plans. You also should factor in more complex financial needs, such as leaving a legacy to your children or donating to favorite charities. Small business owners should seek to make sure their heirs have the funds to purchase the business or replace the business income if they must close or sell it. And if you have a large estate, life insurance can provide funds to pay for estate taxes that would otherwise limit your legacy.
Over your lifetime, your life insurance needs will fluctuate. It’s important to work with a qualified professional who can analyze those changes. If you or a loved one wants help evaluating your life insurance needs, including whether your current coverage is appropriate, please contact our office. We’re here to help!
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