Who Needs Life Insurance?

Your need for life insurance varies with your age and responsibilities. It is a very important part of financial planning. There are several reasons to purchase life insurance. You may need to replace income that would be lost with the death of a wage earner. You may want to make sure your dependents do not incur significant debt when you die. Life insurance may allow them to keep assets versus selling them to pay outstanding bills or taxes.

Consumers should consider the following factors when purchasing life insurance:

• Medical expenses previous to death, burial costs and estate taxes;

• Support while remaining family members try to secure employment; and

• Continued monthly bills and expenses, day-care costs, college tuition and retirement.

What types of insurance can I purchase?

There is term and permanent insurance.

Term Insurance

Term insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future. You may combine cash value life insurance with term insurance for the period of your greatest need for life insurance to replace income.

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Term insurance covers you for a term of one or more years. It pays a death benefit only if you die in that term. Term insurance generally offers the largest insurance protection for your premium dollar.

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Permanent Insurance

Permanent insurance (such as universal life, variable universal life and whole life) provides long-term financial protection. These policies include both a death benefit and, in some cases, cash savings. Because of the savings element, premiums tend to be higher.

How much life insurance do I need?

You should ask yourself the following questions:

• How much of the family income do I provide?

• If I were to die, how would my survivors, especially my children, get by?

• Does anyone else depend on me financially, such as a parent, grandparent, brother or sister?

• Do I have children for whom I would like to set aside money to finish their education in the event of my death?

• How will my family pay final expenses and repay debts after my death?

• Do I have family members or organizations to whom I would like to leave money?

• Will there be estate taxes to pay after my death?

• How will inflation affect future needs?

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Some insurance experts suggest that you purchase five to eight times your current income. However, it is better to go through the above questions to figure a more accurate amount.  Here at Customized Insurance Brokers, we perform a detailed analysis given information you provide us to arrive at the amount of insurance you need to take care of your family in the event of your passing.