Life Insurance
What's your life worth? It is a hard question to ask one's self. How do you figure out what you need to leave your family? How much is enough? How much is too little? If you've shopped for life insurance, that's sort of what you're trying to find out. Chances are, you've heard different people suggest vastly different calculations on how to reach the right number. Here at JVA Investments, we'll show you the right way to assess your needs and come up with the right number.
The reason why it is so hard is that every person's situation is different, and although your financial situation may look the same as your friends', your needs are different. This is why you need to sit down with us to help you sort it all out.
Most Important Factor - Your Dependents
A lot of insurance advice seems to be based on your marital status to determine your insurance needs. The most important factor you will face is whether you have any dependents -- those who are (or who will be) counting on you to support them, either partially or fully -- and how many dependents you have, once you are no longer here.
Here are other major factors to consider:
The kind of lifestyle you want to provide for your family when you are gone.
Do you have a nonworking spouse, who wouldn't have an income if you died?
Would your working spouse, "retire" to raise your children if you died?
Do you have another source or sources of household income, such as a second paycheck?
Do you have sufficent coverage to cover any debts that you want paid off, such as a mortgage, car loan or credit card?
Your family's college expenses. (You thought paying for college before was going to be difficult.)
Your parents, who have now survived you, but had depended on you taking care of them.
Even if you're wealthy and think you don't need coverage, think again. Does your taxable estate approach $1 million if you're single, or $2 million if you're married? If your estate doesn't have enough liquid assets to pay estate taxes, you need more insurance. The Internal Revenue Service will want cash from your estate within nine months, and you might have to invest in a life insurance policy to swing this.
Divorced People and Singles
Divorced people might have special insurance needs. If you fall into this category, you'd better get out your divorce paperwork. It may stipulate that you have to keep a certain level of life insurance in force for your ex-spouse or to pay your part of your children's education.
Single people are often told that they don't need insurance, or that the small policy that comes with their work benefits is enough. In most cases, that's absolutely right. If you lead a simple life with no mortgage and no significant other, a life insurance policy may just be an unnecessary expense.
There are certain instances where you may need it, however. If one of these scenarios applies to you, start thinking about life insurance:
We would be more than happy to sit down and review your individual situation to find the right amount of coverage for your personal needs.