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Insure your home, your car, your life, your wife, kids, pet, your income and the list just keeps going on and on!  We find ourselves in a world of insuring everything apprehensive of a possible tragedy that may never come!  What if it does strike?  What are we to do?  Will we find ourselves protected or vulnerable to an unknown calamity lurking around the very next corner?


Instead of trying to grapple with all of the areas mentioned; let’s take a look at just one area-life insurance.  A policy that pays your loved one (beneficiary)  a sum of money upon your death.  Now the statistics are good that this type of policy will be needed because one out of every one of us will die.  But there are many other details to understand when choosing a life insurance policy.


What kind of life insurance do you need?  Whole life?  Universal life? Term life?  Or a combination?  Once you understand the uniqueness of each type of policy you can begin to create a plan to fit your specific needs.


Which life insurance company should you choose?  When searching for life insurance of course the premium the company charges is definitely a consideration but it is also vital to understand the financial strength of the company you are interested in.  We are in turbulent economic times and you want to make sure the company will pay your claim when it is needed.  Therefore, the financial ratings of the companies are vital in considering which one you will choose.


How much life insurance do you need?  There are many factors that go into this decision.  Do you need income replacement for a spouse?  Do you have dependents?  What about college for them? What about the debt you may leave behind?  Do you  have a mortgage?


Let’s say that you are the only income earner in your household and you have one child.  You have a mortgage of 200K and you are currently making 60K annually.  A good general rule when determining face amount (death benefit) is the following:

60K income x 7 years = 420K

200K for the balance of the mortgage

20K annually for 4 years for your child‘s college= 80K


This would allow your spouse time to replace your income, remain in the home and your child would be provided the opportunity for a future education.  In this example, a 700K policy would be needed.


After a loved one dies, it will be a difficult time. When that person has life insurance already in place it can relieve the financial worries and stress!  Life is very unpredictable ; making it vitally important to address this type of planning while health and time is on your side.  At Freedom Financial Concepts we believe educating yourself is essential to making the right choice for you and your family. 

Posted 6:15 PM

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