Life and Disability Insurance

Life Insurance 

The need for Life insurance is unique for each individual, whether you are a single person or married or even retired your need for protecting your loved ones financial security can be done with purchasing a Life Insurance Policy. 

Individuals and families purchase life insurance for a variety of reasons including:

- marriage
- birth of a child
- divorce (to protect support payments)
- purchase of a new home
- estate planning
- investment

The type of policy you purchase will depend upon your need, while the amount of coverage is influenced by a variety of factors.

• How much debt you have: All of your debts must be paid off in full, including
  car loans, mortgages, credit cards, loans, etc. If you have a $200,000 mortgage and
  a $4,000 car loan, you need at least $204,000 in your policy to cover you debts.

• Income Replacement: One of the biggest factors for life insurance is for income replacement, which will be a major determinant of the size of your policy. If you are the only provider for your dependents and you bring in $40,000 a year, you will need a policy payout that is large enough to replace your income plus a little extra to guard against inflation. To err on the safe side, assume that the lump sum payout of your policy is invested at 8% (if you do not trust your dependents to invest, you can appoint trustees or chose a financial planner and calculate his or her cost as part of the payout). Just to replace your income, you will need a $500,000 policy.

• Future Obligations: If you want to pay for your child's college tuition the costs of those obligations must be added to the amount of coverage you want.

Business and Professionals will also purchase life insurance for a variety of reasons such as:

– buy / sell agreements use life insurance to fund a buy – sell agreement between partners.
-Key man insurance is purchased by businesses to insure a key employee in cases where the business is dependant upon them and would suffer a financial loss in the event of the employee’s death.
 

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