This past March I received some very exciting news; I learned that my wife and I were expecting a baby. That’s an amazing feeling, and like many first time fathers, I felt a need to get my house in order. We had to furnish a nursery, get all the supplies, take all the classes, and start saving for those expensive daycare “tuition” fees. But I was also hit by what is surely the insurance geek inside of me; a need to review my personal life and disability insurance needs. I decided I would also give you some basic ideas on how much insurance you might need.
I once heard an insurance professional explain life insurance as “insurance for the continuation of your income in the event you pass away”, and that definition really struck me. Whether you choose Term, Whole, Universal life, or a combination of those, the goal is to protect an income into the future for your loved ones. How do we know how much insurance is needed? Consider the following:
• How long would you like to replace your income?
• How much debt are you leaving behind and what do you want done with that debt?
• Do you want your loved ones to have an emergency fund?
• Do you want to provide your children with higher education?
• Will there be estate settlement expenses?
• How do you want to pay for your funeral?
Determining the right amount of Life Insurance will not only help you plan for the future, it will also get you thinking about your legacy. Please contact us if you are interested in completing a needs analysis worksheet.
Disability Insurance (DI) may seem secondary or even frivolous to Life Insurance, but it will be your life saver if you lose your income. Nearly 1/3 of the workforce experience a disabling illness or injury for 12 months or longer, so the odds for this occurring are high. DI payments are either a fixed amount or a percentage of your salary. Elimination and duration periods vary depending on the plan selected, and some continue paying until one is eligible for Medicare. Here are some things to consider:
• What are your required monthly expenses?
• How long can you survive without you or your spouse’s paycheck?
• How long will your savings cover your monthly expenses?
• How will your family survive if you are disabled due to illness or injury for more than 24 months?
Life has a funny way of reminding you of your responsibilities. Don’t overlook insurance that will protect your family in serious time of need. Whether you’re going to be a father for the first time, or an empty nester, it’s never too late to get your affairs in order.
