The
Role of Life Insurance
in Financial Planning
GE-28599
(04/04) (Exp.04/06)
When
thinking about their financial futures, many people
focus solely on their investment strategy. The
questions that they most often ask are how they will reach
their financial goals for retirement, college for children,
and other long-term needs.
Investments
are only one part of a long-term financial strategy.
Insurance can be just as critical. Without proper protection,
an unexpected death could
cause a financial plan to collapse.
Help
Secure Your Family’s Future
Life insurance is a cornerstone of financial planning
because investment plans
usually assume that you will live to your life expectancy
so that your income will continue to be generated until
retirement. But what happens if there is no income due
of the death of a breadwinner?
How will your children fund their college education? How
will your spouse live in retirement? What happens
to the assets you’ve accumulated if there is no
insurance to cover everyday expenses?
Life
insurance can be an important addition to any financial
plan, designed to help your family meet current or future
needs. Life insurance can
help cover immediate expenses and can
provide long-term protection of the assets you’ve
earmarked for your family’s future. For example,
insurance will help pay for final expenses, such as unpaid
medical bills, funeral expenses and estate settlement
costs. Also, life insurance can help provide
the money to meet the ongoing costs of running a household—without
dipping into savings and depleting assets needed for the
future.
Death
Benefit proceeds from a properly structured life insurance
policy received by your beneficiary are
generally free from Federal
income tax and can help put the children
through college and continue building a retirement nest
egg for loved ones.
Keep your
insurance up to date with your changing needs.
It’s not enough to buy a life insurance policy once
and forget it. As our lives change, we need to re-evaluate
our insurance coverage to ensure that it continues to
meet changing needs.
Consider:
- How
long ago did you buy your life insurance?
Were your family circumstances different?
-
Have there been changes
in your family’s income, savings, debt or financial
goals that could impact
your insurance coverage needs?
-
If you have term coverage, how long is the term?
Will it be long enough to provide protection until your
children are through college? Will
it help protect your spouse’s retirement assets?
-
Do you anticipate any significant changes in your financial
situation?
-
Have you reviewed your insurance in light of
your long-term savings goals?
-
Who is your beneficiary?
Is this who you want to get the proceeds today? Can
this beneficiary manage the cash provided by the life
insurance?
As
you consider these questions, take
time today to review your present life insurance coverage.
Talk to your financial professional about reviewing your
existing coverage to determine if it is adequate to help
assure a sound financial future for your family.
Lee
Alcorn