Life Insurance Planning
Do you have enough Life Insurance?
Life Insurance Planning is as important as getting life insurance, you don't want to pay for something that isn't going to cover your family's needs.Though there isn’t a set dollar amount that works for everyone, there are some good guidelines that will make the decision mush easier. Read over the guidelines and things to consider that are listed below and download the free Life Insurance Planning Sheet to make sure that you have the right amount of coverage for your family.
Mortgage and other debts
When you die you don’t want your family to be stuck in a situation where they have to sell your home just to survive. If you total your current debts, including your home mortgage, you can then be sure to get a policy that your family can use to completely pay off any outstanding debts you may leave behind.
Funeral Expenses
When planning and buying your life insurance another important factor to consider are funeral costs. Nobody likes to dwell on their funeral, but if you plan it now your family won’t have to figure out all the details later. Average funeral expenses range between $5,000 - $10,000. If you plan on being buried far away from where you live, you should also keep in mind travel expenses.
Current Annual Income
You will want your family to be able to live in conditions to which they are accustomed, this means that your annual income should be considered as well. A good guideline is to provide eight to ten years times your household income for the family to live on while they are adjusting to life without you.
Estate Taxes
Your estate may be subject to estate taxes, which can be significant. A sound Life Insurance Plan will compensate for the tax burden of your estate. You’ll want to talk to your tax advisor to decide how to offset this cost to your family.
College Education
One way to leave a lasting legacy for your children is to provide a way for them to pay for college. The cost of college can vary considerably, so consider the interests, academic abilities and talents of your children or grandchildren and make educated guesses as to what kind of education they may pursue. Remember costs like room and board and books.
Charities
You may have charities to which you would like to award a part of your estate. It’s fairly easy to include a charity as one of your beneficiaries. One thing to consider here are past donations you have made. You can meet with the endowment manager of your chosen charity to work out the details of how you can do this.
Of course your life’s situation will change with time, that’s why it is vital that you review your life insurance plan frequently to make sure that it still reflects your interests. Your family will get the most benefit out of a plan that is current and well thought out. If you have any questions, please don’t hesitate to call us today for a no-obligation consultation.