Life Happens; Be Prepared
September is Life Insurance Awareness Month, a campaign coordinated by the nonprofit Life HappensSM in response to growing concern about the number of Americans who lack adequate life insurance protection. According to the 2016 Insurance Barometer Study by Life Happens and the Life Insurance & Market Research Association, one in three households would have immediate trouble paying living expenses if the primary wage earner died.
So what is the right amount of life insurance? As with many personal finance numbers, that depends on your circumstances, your stage in life and your future plans. Certainly at its most basic, life insurance is intended to offset the financial impact your death may have on the lives of your dependents. That impact may be simply the costs of your final expenses, such as funeral costs, medical bills, taxes, debts and professional fees for attorneys or accountants. Or the impact may be more significant, as in the case of a stay-at-home parent and his or her children, who depend solely on a spouse’s income for all of their day-to-day needs.
Life insurance can factor into more complex financial needs, such as leaving a legacy to your children or favorite charities. It can be important for a small business owner, providing the funds for the heirs to purchase the business or replace the business income if they must close or sell it. If you have a large estate, life insurance can provide funds to pay for estate taxes that would otherwise limit your legacy.
Over your lifetime, your life insurance needs will change. At certain times you may need to increase or decrease your life insurance coverage. While on its surface life insurance may seem to be a one-time decision – you buy it, have the premium deducted from your bank account and never think about it again – it can be a dynamic part of your financial picture.
Mark Slattery Matt Peters
Securities offered through Securities America, Inc. member FINRA/SIPC, Mark Slattery and Matt Peters, Registered Representatives, Advisory services offered through Securities America Advisors, Inc. CaseSlattery and Securities America are separate companies.
Written by Securities America for distribution by Mark Slattery and Matt Peters