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Life Insurance: An Income Replacement Solution

By Pavel Levitanus

Perhaps the most important argument for the purchase of life insurance is to provide for our loved ones. Though no one wants to, it's important to give this some thought: When you die, who is left behind? If your answer is a spouse or children, then consider how their life may change without your income. The mortgage will still need to be paid; other bills will still come due; then there's your kids' college plans. Bottom line: Most things that your income currently pays for or helps to pay for won't go away if something happens to you. One solution: You may want to consider life insurance, an effective income replacement tool.

Although there are several methods available to determine replacement needs, you may want to consider using a multiple of your current salary. An insurance agency can work with you so that you can determine what suits your individual situation.

Some of the factors that an insurance agency will review include:

  • Your specific age and income
  • Your marital status; if married, your spouse's age and income
  • The number and ages of your children; whether any of them have special needs
  • Projections for your children's future education expenses
  • Your family's cost of living
  • How much savings you have in place
  • Your debts
  • Charitable giving goals, if any

If you haven't completed a life insurance income replacement analysis, or if any of the life factors discussed above have changed, try and do so soon. The insurance agency can work with you so you can make sure you have the coverage you want. You can't guarantee that you will always be around to provide your family with an income, but you can help ensure your family's financial security should something happen to you.

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As a California licensed P&C, (Property and Casualty) Life, Health, and Financial...

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