It’s Valentine’s Day and every gift from roses to chocolate hearts are flying off the shelves. If you are a last minute shopper then think about this, the most caring and loving gift you can ever give your loved ones is to protect them with Life Insurance.
We know, Life Insurance is hardly romantic. Maybe you do go with a nice piece of jewelry or flowers but in terms of material things that we can buy for others, is there anything more thoughtful than protection and peace of mind?
A recent survey finds that many parents with children don’t have life insurance. A significant portion of families that do have insurance, have $100,000 or less of coverage, which if you ask any expert they will tell you that is way too little.
Think about whether anyone is dependent on your income. Kids. Siblings. Elderly parents. If anyone relies on you for all or some of their support, the next question I have for you is whether your savings and investments could support them if you were to pass tomorrow. If the answer is “no” then you need to say yes to life insurance!
Aim for a death benefit that is at least 20 times your loved one’s income needs. If you are relying on life insurance through work, you do not have anywhere near enough protection. Most employers provide just one year’s income. It sounds like a lot, but it’s not really enough to take care of your loved ones. One year’s salary isn’t going to help pay the mortgage for very long, or help send a five year old to college.
To make sure your loved ones will be okay, in many cases it is recommended you buy life insurance with a death benefit that is 20 to 25 times the annual income you want to replace. For example, if you wanted to replace $50,000 in annual income you would buy a policy with a $1 million to $1.25 million death benefit. Too much? No, because your beneficiaries could invest the money conservatively-in municipal bonds for example-and live off of the income for a very long time.
So, what can you afford? Talk to an expert. Remember, planning for YOUR future is only a portion of a sound retirement plan. Planning for the loved one or loved ones that depend on you is sweeter than any candy hearts.
Happy Valentine’s Day. We are here to help you show those in your life that they are protected and loved.
Eric and Jennifer Lahaie
JEHM Wealth & Retirement