by Stuart Friedman, CLU, ChFC
When thinking about their financial futures, many people focus solely on their investment strategy. The questions that they most often ask are how will they reach their financial goals for retirement, college for their children, and other long-term needs.Life insurance is considered a cornerstone of a financial strategy because investment strategies usually assume that you will live to your life expectancy and your income will continue to be generated until retirement. But what happens if there is no income because of the death of a breadwinner? How will your children fund their college education? How will your spouse live in retirement? What happens to the assets you’ve accumulated if there is no insurance to cover everyday expenses?Life insurance can be an important addition to any financial strategy, designed to help your family meet current or future needs. Life insurance can help cover immediate expenses and can provide long-term protection of the assets you’ve earmarked for your family’s future. For example, insurance will help pay for final expenses, such as unpaid medical bills, funeral expenses, and estate settlement costs. Also, life insurance can help provide the money to meet the ongoing costs of running a household — without dipping into savings and depleting assets needed for the future.The death benefit proceeds from a properly structured life insurance policy received by your beneficiary are generally free from federal income tax and can help put the children through college while continuing to build a retirement nest egg for loved ones.Keep your insurance up-to-date with your changing needs. It's not enough to buy a life insurance policy once and forget it. As our lives change, we need to re-evaluate our insurance coverage to ensure that it continues to meet our changing needs. Consider:° How long ago did you buy your life insurance? Were your family circumstances different?° Have there been changes in your family’s income, savings, debt, or financial goals that could impact your insurance coverage needs? If you have term coverage, what is the duration of the coverage? Will it be long enough to provide protection until your children are through college? Will it help protect your spouse’s retirement assets?
° Do you anticipate any significant changes in your financial situation?
° Have you reviewed your insurance in light of your long-term savings goals?
° Who is your beneficiary? Is this who you want to get the proceeds today? Can this beneficiary manage the cash provided by the life insurance?As you consider these questions, take time today to review your present life insurance coverage. Talk to your financial professional about reviewing your existing coverage to determine if it is adequate to help assure a sound financial future for your family.Life insurance contains exclusions, limitations, and terms for keeping it in force. Please contact a financial professional for costs and complete details of coverage.Stuart Friedman, CLU, ChFC, is a financial consultant for Irvine, Calif.-based Burnham Gibson Financial Services. He has more than 30 years of experience as a financial services professional, providing his clients with the guidance they need to reach their risk management, investment, and financial planning goals. In addition to being a Chartered Life Underwriter and Chartered Financial Consultant, Friedman’s continuing education includes a certificate in retirement planning from the Wharton School of Business. Contact him by phone at (949) 833-5741 or by e-mail at [email protected]. For more information about the firm, visit the website at www.burnhamgibson.com.
