In these uncertain financial times, it may be more important than ever to think about effective personal financial planning. However, some people believe that financial planning means developing an investment strategy, but it's really a life plan for your finances. You know where you want to end up and you want to plan the safest, surest route to get there.
Financial planning, according to the National Association of Insurance and Financial Advisors, should do three things:
A cornerstone of this financial security and investment growth is life insurance. Life insurance and financial planning can be a powerful combination in helping you plan for your longer-term financial needs.
Estate Planning and Life Insurance
Your estate equals the total of your possessions, such as money and property at the time of your death. While considering your mortality may not be the most pleasant of tasks, ensuring your family is properly taken care of after your passing is important. There are numerous benefits for incorporating an insurance policy--whether term or whole life--into your estate planning needs. Three specific benefits include:
Taxes. A life insurance policy is a unique tax-exempt vehicle that can be used to pay estate taxes
Cash. A life insurance policy can provide your spouse and family members with the ability to cover burial and funeral expenses--costs that might of otherwise may have been difficult to cover
Continued Income. Losing the income of a breadwinner can be difficult and a life insurance policy can make sure income continues to come into your family's coffers
The right life insurance policy can help your family maintain their financial independence in times of sorrow because it can deliver security when your family needs it the most. But, how do you recognize the "right" insurance policy? How much insurance do you actually need?
How Much Life Insurance Will You Need?
To arrive at an estimate, you should take into consideration all of your financial needs--from providing for your family to covering the mortgage. When looking into a life insurance plan, consider:
Thinking ahead--planning long-term--is an important component of managing your family's financial risks and needs. By including life insurance into the financial planning process, you can make sure your family is provided for after your passing.
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