Life Insurance Needs Analysis
In order to make sure you have the right amount of life insurance to protect your family, you need to look at your needs as a family and determine how they might be affected after you pass away. This is called a needs analysis, and you can complete yours by considering the following points:
- Are you married? If you are married then you have another individual who depends on your income for both current and future expenses. This should be considered when you create your life insurance policy. While some living expenses will decrease after you pass others, such as a mortgage payment, will not. In addition, your surviving spouse will need to save for retirement and long-term care costs, which can be supplemented with a death benefit payout.
- How many children do you have? The cost of raising children is steep, and it might not be something that your spouse can handle on his or her salary alone. The everyday cost of raising children combined with the surprise expenses that result from injuries, school trips and growth spurts should be factored into your death benefit as well as:
- Will you be paying for college? Providing a death benefit large enough to cover college tuition costs can prevent your children from beginning their lives in debt and take some of the burden off of your surviving spouse.
- Do they have any special needs? If your children have special medical, emotional or mental needs, this expense can also be compensated with a death benefit.
- Do you have any other dependents? If you or your spouse’s parents or other elderly relatives depend on you for support, either physical or financial, then your surviving spouse may need assistance in continuing to provide for them. He or she may need to hire help, put the relative in a home, or secure additional monies to continue the care.
- What is your total debt? When you pass away you leave your spouse with the debt you created together that was meant to be paid with your combined incomes. You can use your life insurance death benefit to create funds with which your spouse can pay off all debt or some of the larger debts such as your mortgage.
Life insurance fills a financial need that your family has when you pass away. By analyzing your present needs and anticipating some of the future needs they may have, you can create more than a policy; you can build a legacy. Give us a call to start developing your legacy today.
Check with your independent agent at Insurance Advisors to get help sorting through all your Denver Life Insurance options.