Oftentimes insurance can get misused. Many people will look at life insurance as a way to save for retirement. While it is true that life insurance can provide assurances that the stock market cannot, it certainly comes at a cost.
Not all insurance was created equally. When assessing your life insurance needs, consider the following:
- What are the expenses I’m trying to insure against?
- What income am I trying to replace, and for how long?
- What adjustments happen for those that I provide for?
- Are my needs static or do they change over time?
- What will the tax situation be for my estate?
- What can I afford to protect these priorities?
Ultimately short term needs should be met with term insurance while the remainder of premiums saved should be applied to growing your assets. Ultimately replacing the insurance needs with actual assets.
In situations where your needs are long term explore your options, you have several ranging from expensive guaranteed options to less expensive variable options, with little to no guarantee. Your risk tolerance should be assessed separately from retirement planning. Protecting your family carries a different set of goals than your retirement.
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Always remember that while this is an investor education piece, this does not trigger or relate to trading activity on your account with Financial Future Services. This article is for informational purposes only and not intended as a recommendation. Each investors circumstances are different and a full review of you situation is necessary for a recommendation.
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