Financial expert Marion G. Cuff, CFS®: Life insurance: do you need it?
At some point in your life, you will probably be faced with the question of whether you need life insurance. Life insurance is a way to financially protect your loved ones after your death and the cessation of your income. The answer to whether you need life insurance depends on your personal and financial situation.
Should I take out life insurance?
You should probably consider getting life insurance if any of the following are true:
• You are married and your spouse depends on your income
• You have children
• You have an elderly relative or disabled relative who depends on you for support
• Your retirement savings and your pension will not be enough to support your spouse
• You have a large estate and expect to owe property taxes
• You own a business, especially if you have a partner
• You have a major joint financial obligation such as a personal loan for which another person would be legally responsible after your death
Either way, proceeds from a life insurance policy can help your loved ones continue to manage their finances through the difficult weeks, months and years following your death. Proceeds can also be used to cover funeral costs and other final expenses, which can run into the thousands of dollars.
If you’re still unsure whether you should get life insurance, a good question to ask yourself is: if I died today without life insurance, would my family have to make substantial financial sacrifices and give up she has to get used to in order to meet her financial obligations (eg, car payments, mortgage, school fees)?
If you need life insurance, don’t delay.
Once you decide you need life insurance, don’t delay buying it. While no one wants to think and plan their own death, you don’t want to make the mistake of waiting until it’s too late.
Periodically review your coverage
Once you’ve purchased a life insurance policy, be sure to periodically review your coverage, especially if you have a large
life event (e.g. birth of a child, death of a family member) – and make sure it adequately meets your insurance needs. The most common mistake people make is being underinsured. For example, if part of your life insurance proceeds are to be used for your child’s college education, the more children you have, the more life insurance you will need. But it’s also possible to be overinsured, and that’s a mistake too – the extra money you spend on premiums could be used for other things. If you need help reviewing your coverage, contact your insurance agent or broker.
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The Grace Financial Group
Marion G. Cuff, CFS®
Founder and Finance Professional
128 Seneca Lake Road Sparta, NJ 07871