Life insurance is an essential part of financial planning. One reason most people buy life insurance is to replace income that would be lost with the death of a wage earner.
The death benefit provided by life insurance also can help ensure that your dependents are not burdened with significant debt when you die.
Life insurance proceeds could mean your dependents will not have to sell assets to pay outstanding bills or taxes.
An important feature of life insurance is that no income tax is payable on proceeds paid to beneficiaries. The death benefit of a life policy owned by a C corporation may be included in the calculation of the alternative minimum tax. Also, life insurance can potentially help with wealth accumulation.
How Much Life Insurance Do I Need?
Before buying you should assemble personal financial information and review your family’s needs. There are a number of factors to consider when determining how much protection you should have. These include:
- any immediate needs at the time of death, such as final illness expenses, burial costs and estate taxes
- funds for a readjustment period, to finance a move or to provide time for family members to find a job
- on going financial needs, such as monthly bills and expenses, day-care costs, college tuition or retirement.
Although there is no substitute for a careful evaluation of the amount of coverage needed to meet your needs, one rule of thumb is, buy life insurance that is equal to five to seven times annual gross income.
We’re Here to Help
We recommend an annual life insurance review to keep current with your household income as well as changes in family make-up.
As part of your review, we make sure you understand the differences in Term, Whole Life and Universal Life insurance policies so that you can make intelligent choices regarding this extremely important decision.
Our providers are among the leading life insurance companies in the country, so we are able to find the most affordable coverage with the options your family needs.
We have the experience and knowledge needed to assess and advise you on a wide variety of life insurance options, so please feel free to call us today at (401) 821-7330 or send an e-mail request for more information.
Learn more about our other insurance products, including:
- Disability Income
- Long-Term Care
- Supplemental Employee Benefits
- Health Care Insurance
- Homeowners Insurance
- Auto Insurance
- Business Insurance
- Retirement Planning