One of the most important expenditures the average family should make is life insurance. It is also one of the most misunderstood. It is absolutely critical that you make the right decision about the kind and amount of life insurance to buy. In fact, the wisdom of your life insurance purchase could make a major difference in your family’s security, should you die, and your quality of life if you don’t.
Buy the Right Kind of Life Insurance
What’s its purpose?
Life insurance should really be called “death protection” because its purpose is to protect the family against the premature death of a breadwinner or a caregiver. It acts as a substitute for income. When you calculate how much you’ll earn in your lifetime, it’s a fortune! The potential risk of losing that earning power is what makes life insurance a necessity.
Who should buy it?
Mainly people who have others depending on them for income support. If you have a non-earning spouse and/or children, or some other significant financial obligation, you need life insurance. Your spouse may also need coverage, even if he or she doesn’t work, if childcare or other expenses would result from the spouse’s death. If you’re single or have significant cash resources, you probably don’t need it.
What should you buy?
Inexpensive term life insurance. A common misconception about life insurance is that it is a permanent need for each family. Most financial experts see it as a way to simply “buy time” until you accumulate savings, not as a permanent fixture in your financial program.
How Life Works
Your need for life insurance mirrors family responsibilities. When you’re young, you buy low-cost death protection, term insurance, enough to protect the loss of your earning power, and put the maximum amount you can afford into a promising investment program. When you’re older, you may have much less need for insurance coverage. If you’ve saved and invested wisely you should have a significant amount of accumulated cash. You’ve become “self-insured” and eliminated your need for life insurance.
How Much Is Enough?
If you’re like most Americans, probably more than you have! Ten times your annual salary is a good rule of thumb. Whatever coverage you choose, buy only one policy, and put the entire coverage amount on that policy. Separate policies mean separate fees and could cost far more!
Bryan A. McClure
Regional Vice President / Registered Principal
Investment Adviser Representative with Primerica Advisors
3035 S Ellsworth Rd Ste 146, Mesa, AZ 85212
480.888.5769 Bus / 480.242.6623 Cell
This article was written by Bryan McClure, Regional Vice President from Primerica. My family uses Bryan’s financial genius to help bridge the gap in the event of an unexpected loss. He also helps us set and maintain a strict financial diet so we can get and stay ahead of where we used to be, financially. We at HHP highly recommend you meet with your financial representative to discuss your personal goals and how to keep your family financially afloat in the event of an emergency.
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