September is Life Insurance Awareness Month

I received an email today from one of my financial advisor friends advising me and others that this is Life Insurance Awareness Month. I thought this was good information to pass on. Far too often people discount the important role of life insurance in their investment portfolio.

As an estate planning attorney, I see the benefits of life insurance. A loved one has died. If there is no life insurance, the surviving family members may face financial difficulties or even, devastation. Life insurance proceeds, on the other hand, can serve many purposes. One purpose could be as simple as helping to pay for the funeral costs of the deceased. A bigger purpose could be to provide an ongoing source of financial security.

There are formulas for calculating how much life insurance you need. These are often beneficial but one question I always ask is, "Does this feel like enough?" If this was your only source of financial security after the death of your loved one, what would your life look like? Is your goal only to pay off your existing mortgage or debts, or do you want enough to secure your future? If you have children, this can be even more important. Does your surviving spouse have to go back to work and/or hire full time child care in order to continue Your family's existing lifestyle. Do you want your spouse to have to sell everything and move to a different home in order to have enough to survive?

How you answer the question of how much is enough will determine your attitude toward life insurance. Some clients say, "I don't believe in life insurance." I generally respond by asking, "You don't believe it exists or you don't believe it's a good deal?" People who don't believe life insurance is a good deal may not understand how life insurance really works. There are essentially two kinds of life insurance - the kind you buy (permanent insurance) and the kind you rent (term insurance). Term insurance can be a temporary solution to a permanent problem. This doesn't mean I don't think there's a place for term life insurance, I do. It's generally true though that more often than not, term insurance expires and becomes too expensive before a claim is ever paid. For this reason, I suggest everyone, at the earliest age possible, explore the benefits of permanent insurance. Permanent insurance can offer a number of significant benefits.

I don't sell life insurance - haven't had my license now for a number of years. I do appreciate the benefits of life insurance and I'm happy to suggest a respected agent for you to talk to if you have questions.

In honor of Life Insurance Awareness Month, I would suggest you review your existing life insurance and make sure it is sufficient to address your needs. Today is the day, tomorrow may be too late.