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How to Budget for Life Insurance

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.

Spring Clean Your Finances

Spring is an ideal time to roll up your sleeves and get to work on the clutter and dusty piles you might have accumulated over the winter. And while you might automatically turn to spring cleaning your home or office, consider that this season is also an ideal time to take a look at your finances to make sure you’re on track for the rest of the year.

Here are some ways you can spruce up your finances this season:

Double Check Your Withholdings

We’re deep into tax season, and whether you’re the type to finish your taxes early, file on Tax Day, April 15th, or file for an extension, it’s never too late to think about how to save money next year. After all, it’s the money that you earn and taxes that you pay during this calendar year that’ll affect your numbers when you go to file in 2020.

This year, with taxpayers feeling the impacts of the new tax law for the first time, it’s especially important to take a look at your withholdings. You may find it necessary to make adjustments in order to set aside the right amount for the rest of the year so that you can avoid unpleasant surprises next tax season.

Tidy Up Your Budget

Around the beginning of the year, it’s not uncommon for people to resolve to make this the year that they make a budget and stick to it. How about you?

If you started off the year with intentions to get your finances on track with a new budget, are you making progress toward that goal? If not, consider adjustments that you can make. Maybe there are some places you can save a little more. Or maybe you’re not spending as much in one area as you thought you would and you can allocate that money to another line item.

Remember, you don’t have to set aside your good intentions just because you might have gotten off track. A step toward budget correction is always a step in the right direction.

Review Your Accounts

While you’re sifting through papers in your home office, take some time to look through information related to your family’s accounts. From savings accounts to retirement accounts, take stock of the assets you have and make note of any accounts that need attention.

Depending on life changes you may have had during the past year, you may want to pay special attention to account changes that have the potential to benefit you in the coming year.

Put Your Financial Plan Together

If you haven’t done so already, spring is the perfect time to get your financial plan together. This time of year, you’re probably already aware of your financial status, thanks to the mandatory review you go through at tax time.

It’s only natural to take advantage of that awareness – and the fact that your financial info is likely sitting somewhere convenient for you to access – and make time to meet with a financial advisor to make a plan for the future. An advisor will help you to determine your values and take steps to work toward your desired financial future.

Or maybe you already have a financial plan in place and simply need a yearly tune-up. If you haven’t already, put a meeting on the calendar and sit down with your advisor to review your plan and make any necessary adjustments.

If you’re ready to tidy up your finances and shine up your portfolio call or email us to set an appointment.

Important Disclosures:

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.