Setting yourself up for the likelihood of long-term financial success involves thinking through plans to protect your family and assets even if something were to happen to you. Life insurance is often part of the long-term planning puzzle, but can look different for individuals and their families.
If you’re evaluating your life insurance options and wondering how to fit a policy for yourself, your spouse, and/or other family members into the picture, read on to learn more about some of your options.
Evaluate Your Coverage Needs
The first place to start when planning for life insurance is by taking a look at your current needs. After all, you can’t know how much life insurance you need or which policies will fit into your plans until you know what you want to have covered.
For many, this means taking a look at likely expenses you’ll encounter in the event of your (or a loved one’s) passing. These include things like a funeral and other arrangement expenses, as well as debt repayment and income replacement needs
You’ll also want to take some time to check over your existing monthly expenditures to see how covering your premiums might play into your short- and long-term financial plans. Remember, the more coverage you opt for, the more you’ll pay on your insurance premiums. However, most families find that the peace of mind from having a robust life insurance plan in place is worth any temporary financial inconvenience.
Understand Your Coverage Options
After reviewing your coverage needs, you will want to take time to understand how your life insurance will work for you. Here are some basics to consider:
- Choosing beneficiaries: When you establish your life insurance plan, you’ll need to choose beneficiaries to receive payout upon your passing. Typically, this includes your spouse and children.
- Whole life and term life insurance: These are two of the more popular options for life insurance coverage. Whole life insurance covers you throughout your life and accrues cash value as you invest, while term life insurance covers you during the coverage term and may be converted to whole life insurance at the end of the policy’s term.
- Return of premium policy: This type of life insurance policy provides the typical benefits of life insurance coverage with a payout of your invested premium payments throughout the life of your policy. Choosing a return of premium policy can play into your overall estate planning strategy and benefit for your loved ones in the long-term.
Review Your Financial Goals
Your life insurance policy coverage should play into your overall financial goal setting. When viewed as part of your financial action plan, life insurance is an important tool that can help you get closer to your desired financial future. Talk to your financial advisor about your coverage options and what level of coverage might be a good fit for your specific situation.
There are multiple variables to consider when browsing life insurance policies, from term to permanent policies and convertible options. Thankfully, you don’t need to be an expert in discerning the differences from policy to policy when you have a trusted financial advisor on your side.
If you have questions about preparing your financial plan and whether life insurance should be a part of this equation, contact Puckett & Sturgill Financial Group for a discovery consultation today! We can help you work through questions related to life insurance and related long-term financial planning needs.