Wednesday, December 5, 2012

Determining the “Right” Amount of Life Insurance

According to a recent study, Americans are more concerned with being able to pay their mortgage and other bills today than they were a year ago. Now, more than ever, it is crucial that consumers protect their financial security.1 Life insurance is one tool that can provide this kind of protection. The fundamental question is: what is the “right” amount of life insurance?2

For anyone weary of writing checks for life insurance premiums, retirement used to signify relief for some. With the mortgage paid, the kids on their own, and Medicare and Social Security on the way, common sense suggested you could safely let your insurance expire. Now, some retirees no longer have the flexibility to discontinue their life insurance. Life expectancies are rising3, and the expenses that the death benefits were earmarked for are hanging around longer. Your spouse may need an extra financial safety net after you die. And what if your children aren't self-sufficient?4

Here are some important questions to consider:

  • How much of the family income do I provide?
  • If I were to die early, how would my survivors manage?
  • Does anyone besides my spouse and children depend on me financially (such as a parent, grandparent, brother or sister)?
  • Do I have children or grandchildren for whom I’d like to set aside money to help with education expenses?
  • How will my family pay final expenses and repay any outstanding debts?
  • Do I have family members or organizations to which I would like to leave money?
  • Will there be estate taxes to pay after my death?
  • How will inflation affect future needs?5

With so many factors to be considered when determining the “right” amount of life insurance, we highly recommend that you discuss this important topic with your financial planner. Please contact us today to discuss your life insurance needs.

"2012 Life Insurance Awareness Month" Life Insurance and Marketing Research Association;

"How much life insurance do you need?", May 8, 2010;

"U.S. Life Expectancy at All-Time High” World Climate Report, March 17, 2011;

"How Much Life Insurance Do You Need?" Kiplinger, August 15, 2010;

"Life Insurance Buyer’s Guide" National Association of Insurance Commissioners, Revised 2007;

All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.

Securities and investment advisory services offered through National Planning Corporation (NPC), NPC of America in FL & NY, Member FINRA/SIPC, and a Registered Investment Adviser.  Registered Representatives of NPC may transact securities business in a particular state only if first registered, excluded or exempted from Broker-Dealer, agent or Investment Adviser Representative requirements.  In addition, follow-up conversations or meetings with individuals in a particular state that involve either the effecting or attempting to effect transaction in securities, or the rendering of personalized investment advice for compensation, will not be made absent compliance with state Broker-Dealer, agent or Investment Adviser Representative registration requirements, or an applicable exemption or exclusion.  Kemp and Associates and NPC are separate and unrelated companies.  NPC PRIVACY POLICY.     NPC # 68191    11/14

The information being provided is strictly as a courtesy.  When you link to any of the web sites provided herewith, you are leaving this site.  We make no representations as to the completeness or accuracy of the information provided at these sites.  Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technology, sites, information and programs made available through this site.  By clicking on the links above you will leave our web site and assume total responsibility and risk for your use of the sites to which you are linking.

Opinions voiced on this blog are not intended to provide specific advice and should not be construed as recommendations for any individual.  To determine which investments may be appropriate for you, consult with your financial, tax or legal professional.  Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk.  There are no guarantees that any investment strategy will meet its intended objective.