Nobody likes to talk about life insurance. It’s one of those things in life most people wish they could ignore, but it’s one of the most important things you can purchase to help the emotional health of your loved ones.
At the same time — unless you’ve been living under a rock, in which case you get an A+ for social distancing — you know the world has become more dire in the last few months. With over 3.8 million cases of COVID-19 at the time of this writing, there’s more chance than ever of contracting it.
In addition, as you’ve likely heard from the media, older generations are most at risk from suffering severe illness or death from the virus. If you’re a retiree, this puts you in one of the high-risk groups.
That means not only is it more important than ever to check your retirement planning in light of what the economy’s doing — it’s even more important to check your life insurance.
Life insurance is for protecting your family from experiencing financial burden if you or your spouse pass away unexpectedly. Many people realize that but don’t recognize how far their life insurance coverage needs to go.
One way to calculate this is by using the L.I.F.E. method:
–Liabilities: This includes your mortgage and any outstanding debt or loans.
–Income: Would you want your spouse to have to go back to work right away just to pay the bills? If not, how long would you want them to be provided for?
–Funeral: Expenses for a funeral can cost thousands of dollars. It’s the last thing you want your loved ones worrying about.
–Education: Many people want to leave funds to children for future education.
Once you add these together, you might realize your life insurance need is much larger than you originally thought.
That answers the how much question. Now you have to answer where you should have your insurance located. Many people have life insurance through work but nothing beyond that. Barring the fact that that insurance amount is probably exponentially too small, the real question to ask today is: What happens if that job goes away?
Sadly, millions of Americans have lost jobs in the last few months. If any of those workers only had life insurance through their work, their lives and loved ones are now no longer covered in the event of their untimely death. Someone who is healthy and unemployed can likely still get life insurance, but it will be much more expensive, especially for someone close to retirement.
That’s the scenario you want to avoid before it’s too late. The American Retirement Institute’s financial educators can give you information so you can determine the best strategy for your life insurance goals to help bring some much-needed peace of mind during this time.
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