Life Insurance

Life insurance is a critical component of your family’s overall financial security. It is typically part of every financial plan.

There are many different options with life insurance.  The type of life insurance that is right for you can depend on the financial goal you are working to achieve.  Term insurance for a need that lasts only for a specific time period, Universal Life or Whole Life insurance for a more permanent need.

How Much Life Insurance do I need?

Immediate Cash Needs
1. Final Expenses: The amount needed to cover all final expenses upon your death. This includes funeral costs, medical expenses, probate fees, etc. Current average funeral expenses are about $10,000.	$
2. Mortgage: Enter your mortgage balance here, if you intend to pay off your mortgage upon your death.	$
3. Other Debts: Estimate the amount needed to pay off your debts. Include credit card balances, car loans, educational loans, and other outstanding  liabilities.	$
4. Emergency Fund: The amount you would like to reserve for unforeseen financial needs, such as income lost due to work absence, medical expenses, and home/auto repairs.	$
5. Education Fund: The total cost of sending your children to college. The current annual average cost of public and private colleges are about $13,000 and $28,000, respectively.	$
6. Total Cash for Immediate Needs: Sum of Lines 1 through 5		$
Future Income Needs
7. Survivor’s Income Replacement Need: Generally, your family will need to replace 60% to 90% of your current gross annual income in order to maintain its standard of living after your death.		$
Available Funds
9. Savings and Investments: The current value of savings and investments which may be liquidated to provide your family cash flow upon your death. Include stocks, bonds, savings accounts, etc.	$
10. Retirement Savings: The current value of retirement savings which may be liquidated to provide your family cash flow upon your death. Include IRA, 401(k), annuities, and other retirement accounts.	$
11. Other Assets: All other assets which may provide income to your family (inheritances, commodities, rental properties, etc.)	$
12. Current Life Insurance: Include all life insurance policies, including coverage through your employer.	$
13. Total Available Funds: Sum of Lines 9 through 12		$
Needs Summary
15. Total Funds Needed at Death: Line 6 plus Line 9		$
16. Total Available Funds: From Line 14		$
17. Estimate of Additional Life Insurance Coverage Needed: Line 15 minus Line 16		$

We will help guide you to , select an insurance companies with a strong  reputation and financial strength. The number of years the company has been in existence is also crucial especially if a long term policy is to be purchased. Periodically, the policy needs to be increased because of the cost of living and improvements in standard of living. Usually, reviewing the coverage once every 5 years is advisable. However, if there are some major changes involved, such as buying a new home, or a substantial increase or decrease in the household income, then the life insurance policy may have to be reviewed immediately.