Mark Stevens

Life Insurance

You know a funny thing about life insurance; it’s got the wrong name. When you think about home owners insurance or auto insurance they are named more appropriately. After all, you might be able to replace a car but you can’t replace a life.

So what should it be called? Well, think about what you’re really insuring. You can’t replace you, but you can replace your income.

For example, if you make $80,000 a year and you die, your income dies with you. People use life insurance to replace that income. So not only does your loved ones have to deal with losing you, but also the financial security you provide them through your earnings. In this example, that could add up to a lot of money if you are still 20 years away from retiring- at least $1.6 Million. That is exactly what I tell my clients they need to think about when considering how much life insurance to buy.

Even after we figure out how much income you want your family to replace, we still have to determine what kind of life insurance, as well as, when to buy each type based on your life situation.

I might recommend you start with the articles found in the’ Reading Room’ called “Life Insurance Basics” and “Life Insurance at Various Life Stages”. These articles include a good overview of how different kinds of insurance are appropriate at different stage of life.

When working with a life insurance professional be sure to avoid those who simply sell life insurance products and instead seek a financial planner who can make sure your life insurance complements your goals and needs AND suits your cash flow and income properly. Even though I have never heard a beneficiary say I wish they left me less life insurance”, you don’t want to spend too much on life insurance or have the wrong kind.

Of course, if you have any questions you can click on the link above to schedule a Free 15 minute consultation. We love doing what we can to help, so take advantage of this, it’s a great way to get your questions answered.