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Most people start to think about life insurance after they’ve married and had children. That’s because the main goal of buying life insurance is usually to replace income if the buyer’s earning power is taken away by death. The industry standard on how much life insurance you need is five to ten times your annual salary. But it really depends on several factors such as your age, the ages of your spouse and dependents, your income, and your debts. Premium rates go up as you age, so it’s more cost effective to buy life insurance when you’re young, and also allows you to purchase more coverage.
You can use the ages of your dependents and spouse to judge the amount of income replacement they’ll need if you die. This will vary per individual as some dependents may need support temporarily, but others could have special needs that require support for life. If you’re just starting out, there will be many years of income to replace versus someone who’s near retirement or has no debts. A 50 percent income replacement is a starting point suggested by some experts. Your mortgage, car loans and any other debts should be included in your insurance planning. Also factor in future education for your children. Life insurance is an important investment that can help substitute your income and maintain your family’s current standard of living upon your death. If you’d like to learn more about the right life insurance policy for your family’s needs, give us a call or stop by our website today. Benny Levy 303-946-8992 [email protected] Life Insurance in Denver Colorado
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Many people don’t know that a whole life insurance policy can be a source of income for retirement. With a whole life policy, your premiums don’t change, and coverage lasts for the rest of your life. Whole life policies also accrue “cash value” over time, because a small percentage of the premium that you pay for insurance costs goes into a savings account that earns interest. The rate of return varies from company to company, and the cash value of the policy can be withdrawn as an additional source of retirement income. If the amount withdrawn doesn’t exceed the amount you’ve paid in premiums, that money will be tax-free. Of course, withdrawing these funds will reduce the death benefit to your beneficiaries, and withdrawing any dividends earned could be taxed as income. Before deciding whether a whole life policy is right for you, you should understand all your options by speaking with a financial professional. To learn more about smart retirement savings strategies, give us a call, or visit our website today.
Benny Levy 303-946-8992 [email protected] Insurance in Denver CO |
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September 2024
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