Life Insurance for a Family of Four

What sort of life insurance should you buy if you are a family of four people?

How much should you get and what kind of life insurance should you buy?

That can be an overwhelming decision to make but you can find the answers you need here.

If you have a family of four, your main objective is to see that they are financially covered if the main breadwinner in the family were to die unexpectedly.

When that happens, there is a major financial loss that may be encountered by the family.  It’s not just the loss income either.  Since life insurance is a long term investment you also want to plan for the future, and even for your retirement because, depending on the type of life insurance policy you buy, you can even use life insurance for when you plan to stop working.

Decide Why you Need Life Insurance

Life insurance can cover your family in a variety of different ways.  It all depends on your objectives and how you envision how your loved ones can use the life insurance proceeds.

Many people buy life insurance simply for the purpose of income replacement as their primary objective.  But there also plenty of other reasons where life insurance can be used as a financial umbrella for your family.

It depends on what stage of life you’re at such as when the children are very young or maybe entering in their pre-teens.  You also need to consider what savings and investments you have already set-up for your future, along with whatever plans you have with your company.

Life insurance proceeds can be used to pay off your death and funeral expenses, along with being used to pay off all your outstanding debts.  Everyone takes out loans to buy things such as a mortgage for your new home, buy a car and uses credit cards.  These debts can be hefty.

You also maybe want to think about the kids’ tuition as I’m sure you know that college and university tuition is a pretty lofty expense.

Life insurance is also a good alternative instead of mortgage insurance.  It can be quite a bit cheaper than what the lender might be offering.  The other good thing about using a life insurance policy is that your named beneficiary will be the person who receives the proceeds, because otherwise it will be the lender who benefits if you buy mortgage insurance through them.

Many people also work for themselves or are in partnership with other people.  If this applies to you then you will want life insurance to cover your business expenses, or use it as a buy/sell agreement with your partner(s).

If you are starting to make some real money then you might also want to consider life insurance as part of your estate planning because the proceeds can be a valuable form of liquidity that can cover the hefty estate taxes that follow.

These is a brief breakdown in how you determine how much life insurance to buy.

Advantages of Life Insurance

The first major advantage of life insurance is that your family can quickly and conveniently access the proceeds almost right away so they can use the proceeds to soften the financial blow were you to die unexpectedly.

The second advantage is that the proceeds are paid as a lump sum.

The third and biggest advantage of life insurance is that the proceeds are essentially non-taxable so it gives your family immediate liquidity without the IRS grabbing a chunk of change.continue page 2……