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Life Insurance: What Stage Are You In?

With this month's focus on the theme of the year: "Life Insurance: A simple act of love," you will be seeing #insureyourlove throughout social media to celebrate this mantra.

As a business owner since 2018 and an employee in the financial services industry since my early 30s, I feel confident about sharing many reasons to #insureyourlove and life insurance is just one solution among many to discuss. This article will cover life insurance in general. This is from my personal experiences and taking off my insurance advisor hat for a moment.

Just like we all strive for financial independence, we cannot forget about the resources that are needed to transfer risk away now, so that we still create financial independence in the event something happens to us before we can actually do so.

It is a great feeling when you have peace of mind; knowing that you took the time to set up goals and tools to protect those you love financially.

When you take away this type of stress from your other responsibilities, it is truly a great feeling!

So do you need life insurance? My answer is going to be rather simple; although I always prefer to think of everyone's situation as unique and one that should be customized. But it will most likely default to Yes, you probably need life insurance.

If you can fund your life and future goals with your current resources - then No, you do not! If you financial responsibilities that cannot be 'self funded', then you probably need life insurance.

Anyone on this list could benefit from a life insurance policy:

♦ Single Individuals

♦ Single and/or Stay-at-Home Parents

♦ Spouses/Partners with or without Children

♦ Empty Nesters

♦ Business Owners

♦ Charitable Interests

♦ Retirees

My Personal Lifecycle Stages that required life insurance are listed below, which ranged from being single, to then married and then adding on coverage while expecting a baby.

Prior to being married, I had a previous term policy provided to me by my father initially and he eventually had me take that over once I had a steady income. That policy ran through it’s term, (terms for life insurance are generally 10, 20, 30 years), so that policy had previously expired prior to me meeting my husband. I didn’t purchase another policy again until I was married. Both my husband and I picked up insurance at the same time and again six years later, we added on coverage when we had our daughter. Shortly thereafter, we insured her too, but we will stay focused on going through phases of being single to married, being insured and then updating policies as our needs starting changing.

1. Being Single: My first phase of coverage was while I was under student loan debt coming out of college and had other obligations to my parents. That original policy was to cover my parents in the event something happened to me while I was single. Purpose #1 - taking care of parents.

2. Marriage: My second phase of coverage was due to marriage and insuring each other to cover mutual expenses such as miscellaneous debts, our mortgage, and car payments. Additionally, if something were to happen to one of us, it is possible that we may have been out of work for a period of time due a period of grieving. Purpose #2.

3. Expecting a Baby: My third phase of needing to establish coverage was while I was pregnant. I remember that moment while pregnant, where I was very worried about being left alone with a new business, new baby and to be responsible for it all by myself; not having enough financial means to carefully plan for our family's goals in the event of a catastrophe. Having enough in place was important to us, which is why more coverage was added on after securing our original plans so that we felt comfortable in the event of something happening to one of us before our assets were free and clear and retirement plans fully funded.

Now this doesn't tackle the way we handled our beneficiaries, especially with a blended family but that will be covered in a different article. This is the most popular question I get as an insurance advisor, is how to think about who to name as primary and contingent beneficiaries.

The reason life insurance is a risk management solution for most individuals is defined below.

By having policies in place, I didn't have to question what would happen if something happened to my husband and I financially, in the event we lost one another.

By having a life insurance contract with proper beneficiary designations, you are allowing yourself to not leave everything to probate courts and decisions based upon the state you live in among many other estate planning rules that apply to attorneys to outline for you. All of this is especially important, if you have no valid will which is called being intestate. Webster Dictionary defines intestate as:

1: having made no valid will died intestate 2: not disposed of by will an intestate estate

Your life insurance contract can leave proceeds directly to the parties named in the contract.

If someone were to pass, life insurance pays a death benefit to the people named within that contract for coverage and can avoid the need to go to probate to disburse funds to the named beneficiaries within. Also, typically these benefits are tax-free. It is very important to keep those beneficiaries updated so that you have managed the proper distribution of assets in the contract and not in the wrong hands.

Still not sure if you need life insurance? You can schedule a complimentary session with me so I may answer your questions.

If you want a quote within minutes, you can find our life insurance tool here.

I feel that it is our responsibility to take the time to handle our affairs while we are alive and well. We all have so many resources available to us now, to help us find an independent insurance broker and most brokers will help you with the insurance application online these days. This does make the processes more efficient. If you still haven't finalized your financial independence, please take the time to #insureyourlove and do so while you while you are young and healthy!

Disclosure: Please note that I am not an attorney, but a licensed life insurance broker. The information above stems from my personal experiences as well as education from American College where I earned my Chartered Financial Consultant designation. Please contact an estate planning attorney if you have questions about how you should handle your current beneficiary designations and/or ways to achieve the best estate plan for your needs.


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