Life Insurance 101: Answers to Your Questions

​Considering buying life insurance? That could be a wise decision, especially if you have children or other dependents who rely on you for income. Many people purchase life insurance to protect their spouse, children or other loved ones. If you pass away, those closest to you may face financial difficulty. Life insurance minimizes that risk and provides them with a tax-free benefit they can use to overcome financial challenges like debt or loss of income.
 
You may find the available life insurance choices to be overwhelming. A wide range of policies are designed to meet different goals and needs. You also may be unsure of how much coverage you need or how the policy will interact with your group life insurance.
 
Below are a few common questions and answers about purchasing life insurance. A financial professional can help you answer additional questions and find the right protection for your needs.

Do I still need individual coverage if I have it through my employer?
 
It’s common for employers to offer life insurance protection as part of a group benefit package. This employer-based coverage is often affordable or may have no cost. If you’re covered by an employer plan, you may believe that you don’t need an individual policy.
 
You may not want to rely on employer coverage as your only form of protection, though. If you lose your job or change employers, you may lose your group coverage. If your health has declined in the meantime, you may not qualify for an individual policy. You can avoid that risk by purchasing individual coverage while you’re healthy. An individual policy helps you stay covered no matter what happens in your career.

How can I get the coverage I need and stay in budget?
 
Perhaps you need a significant amount of coverage but are also on a tight budget. Fortunately, there are a couple of ways you can maximize your premium dollars and get as much protection as possible. One is to purchase term insurance. This provides coverage for a limited duration, such as 10 or 20 years. Everything else being equal, a term policy is usually more affordable than a permanent policy.
 
Another strategy is to purchase life insurance sooner rather than later. Two of the biggest factors in calculating your premium are your age and your health. The older you are, the higher your premiums are likely to be. There’s also the risk that you may develop a health issue as you get older. You can avoid that risk by purchasing life insurance as soon as you identify a need.

How much death benefit do I need?
 
It’s impossible to predict every challenge your family may face after your death. People often use simple formulas, such as a multiple of their annual income, to estimate a coverage amount. However, those equations and formulas aren’t based on your unique needs.
 
The best approach is to consider the financial needs and difficulties your family may face after you pass away. Would they miss your income? Would they face sizable debts? Do you want to help them achieve certain financial goals such as retirement or higher education? A financial professional can help you estimate the cost of these objectives and project an accurate funding need.
 
Ready to develop your life insurance strategy? Let’s talk about it. Contact us today at J. Harris Financial. We can help you analyze your needs and find the right coverage for you. Let’s connect soon and start the conversation.
 

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
17962 – 2018/9/4

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