Life Insurance Coverage...A Closer Look
By Richard M. Sandy
As I work with clients, one issue that comes up a lot is life insurance coverage, or the lack thereof.
For many couples it's on the low end of their priority list as we discuss their investment plans. As a result, I've encountered many couples whose only coverage is provided through their job and usually in amounts of $ 50,000.00 or less. There's also a surprising number of older couples, I've met, with that have no life insurance coverage at all.
So if you fall into either of these two groups, you don't have to feel alone. But I would like you to be uncomfortable enough to take a closer look at what proper coverage you should have for yourself and your family.
A general industry rule of thumb is that we should have coverage at some multiple of our annual income based upon our age. As an example, someone who earns $ 35,000.00 might have a multiple of 30, suggesting life insurance coverage of just over a million dollars.
Before you get sticker shock, please realize that other factors also come in to play when coming up with the appropriate amount of coverage. Some examples could be; Do you have a spouse and how much do they earn? Do you have dependents and how old are they? What is your debt level and so on.
I'd like to suggest that at the very least a married couple with children obtain enough coverage to payoff all outstanding debt, provide an education for the children and allow the spouse and children to maintain their normal life style for a reasonable period of time.
When I've asked clients “If you agree with the above, why don't you have more coverage?” They most often respond with “We just don't have the money.” In today's insurance market, companies have come a long way in successfully addressing that concern. Our focus, in this article, is only on the type of life insurance contract that gives the insured the largest benefit for the smallest premium paid. This type is referred to as level term insurance. Under this type of coverage the benefit and premium usually stay the same throughout the term of the contract. No cash value accrues in the policy as can happen in other types of contracts, known as permanent policies. At end of the term, the premium usually increases significantly enough so that continuing the contract isn't financially feasible. Having said that, term policies play a vital role in allowing couples to provide appropriate coverage during the years their family is growing and when debt and other expenses may be at their highest. All this at a very affordable cost.
I invite you to give me a call to discuss how affordable appropriate life insurance coverage can be for you.
Quotes are obtained through a process that evaluates a number of different life insurance companies so that I can provide my clients with cost effective solutions through well rated carriers.
Richard M. Sandy
Registered Representative
Genworth Financial Securities Corp
Ins Lisc # E078647
Investment Adviser Representative
Genworth Financial Advisers Corp
704 SW 3rd Ave
Ocala, FL 34471
352-867-5005
