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INSIGHTS

Expert Series: Why Insurance should be part of your financial plan

Most people don’t consider insurance as part of their long-term financial plan. You’ve got your retirement, investments, and home. But are you considering this extremely valuable asset as part of your long term financial plan?

We spoke to Dan Greene, a life insurance evangelist and licensed agent on why its so important to not only have life insurance but also include it as part of a holistic financial plan for your family.

“I’m a firm believer that life insurance is the foundation of any financial household. If you’re going to build a house, you want the foundation made out of concrete, not cardboard. Life insurance is that concrete for your financial house. Without it, the remainder of the household’s hopes and dreams can collapse. For just a few cents on the dollar, you can buy your family the financial security it needs, and as an added bonus, the money left to them is free from taxation.”

There are many reasons why life insurance should be part of your long-term financial plan. Here are a few of the most important ones:

  1. Immediate cash. If you die unexpectedly, your loved ones will be faced with a number of financial challenges, such as paying off your debts, covering your funeral expenses, and just handling other immediate expenses. Life insurance can help to ease these financial burdens and give your loved ones the peace of mind that they will be taken care of financially.
  2. To help pay off debt. If you have a mortgage, car loan, or other debt, life insurance can help to ensure that your loved ones will be able to pay off these debts after you die. This can free up their income so that they can focus on other expenses, such as raising children and staying on track with financial or retirement goals.
  3. To provide for your children's education. If you have young children, life insurance can help to ensure that they will be able to afford college. The death benefit from your policy can be used to pay for tuition, fees, and other expenses.
    To cover your final expenses. The cost of a funeral can be expensive, and life insurance can help to cover these expenses.
  4. The death benefit from your policy can also be used to pay for other final expenses, such as estate taxes and probate fees.
  5. To provide for your retirement. If you don't have enough savings to cover your retirement expenses, life insurance can help to supplement your income. The death benefit from your policy can be used to pay for retirement expenses, such as housing, healthcare, and transportation.

“One of the objections I hear most is ‘I don’t need life insurance.’ But life insurance isn’t for you, it’s for the living. It’s for those left behind when you’re gone. So one of the most important questions to ask yourself is not whether you need life insurance, but whether or not your family and survivors would need you to have it. Buying life insurance is about love. It’s saying to your family ‘I’ve got your back no matter what, even if I’m not here anymore.’ And that is a powerful expression of your love for your family.”

“Another thing to think about is that life insurance can even buy you the one thing that is priceless to us all - time. Think of the average hopes and dreams for someone 30 years old who just got married and wants to start a family. It takes years and years of paychecks to buy your home and pay it off, buy the family vehicles, save for retirement, save for college, keep up with everyday expenses, and so on. But if that person dies suddenly at 35, those future paychecks never get deposited. The emotional blow of a premature death is enough, but if you planned for and bought the correct life insurance, your family will be better equipped to continue on with their current lifestyle. I just can’t imagine someone with a family not purchasing life insurance, especially considering all the other things we spend money on every month that really doesn’t matter nearly as much at the end of the day.”

Here are some additional things to consider when deciding whether or not to purchase life insurance:

  • Your age and health. The younger and healthier you are, the more affordable life insurance will be.
  • Your financial obligations. If you have a spouse, children, or other dependents, you'll need to consider how much life insurance you need to provide for their financial security.
  • Your income and assets. If you have a high income or a lot of assets, you may not need as much life insurance.
  • Your goals. What do you hope to achieve with life insurance? Do you want to provide for your loved ones financially, pay off debt, or cover your final expenses?

Not sure where to start? A qualified professional life insurance agent like Dan can quote you on competitive pricing. Once you've considered all the above factors, you can talk to a financial advisor to get help choosing the right life insurance policy, and agent, for you.

If you have questions about how “recession-proof” your investments are feel free to reach out with questions or to have a conversation.

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