{"id":1343,"date":"2020-09-03T09:50:53","date_gmt":"2020-09-03T13:50:53","guid":{"rendered":"https:\/\/www.thewealthguardians.com\/staging\/3023\/?p=1343"},"modified":"2022-01-07T12:38:04","modified_gmt":"2022-01-07T17:38:04","slug":"the-importance-of-budgeting-for-life-insurance","status":"publish","type":"post","link":"https:\/\/www.thewealthguardians.com\/staging\/3023\/the-importance-of-budgeting-for-life-insurance\/","title":{"rendered":"The Importance of Budgeting for Life Insurance"},"content":{"rendered":"

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Many years ago, I worked with a widow whose husband died from brain cancer in his early forties. Ten years earlier, he made sure to purchase a substantial amount of term life insurance, even more than his young, inexperienced agent had recommended at the time.\u00a0 He wanted peace of mind knowing that, when he passes, he will be leaving his family in good financial standing and has accomplished his lifetime financial goals. And because he effectively planned, his wife will now have a comfortable retirement, his debts have been paid, his daughter went to college, and he was able to finance her wedding.<\/p>\n

No one wants to think about dying, but as we grow older, it becomes essential to know how to safeguard the financial future of those that depend on us, as a premature death can derail financial plans for your spouse and kids. Life insurance is a crucial asset that can protect against uncertainty and form a solid foundation upon which to build a comprehensive financial plan.<\/p>\n

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Not sure how much life insurance to purchase and budget for in your monthly expenses? Here are a few tips to help you get started:<\/p>\n

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  1. First, work with a financial professional to develop a comprehensive financial plan to discover financial life goals that will be adversely impacted by your death. By adding up these expenses and the expenses associated with your death, you can begin to develop the needed \u201clife insurance coverage\u201d figure.<\/li>\n
  2. Second, make sure you are only buying what you need. However, be sure to plan for future lifestyle cost and inflation. Some financial planners use the general rule of thumb that you need to maintain at least 10x your annual salary in benefits to cover your survivor\u2019s needs, planning to pay at least 2 percent to 5 percent of your annual salary on coverage.<\/li>\n
  3. Third, it is important to realize that you can \u201cladder\u201d your insurance coverage so that parts of it expire when certain goals are achieved or outlived. For example, when you\u2019re young, you may need insurance for your survivor financial benefits, debt pay-off and your kids\u2019 college tuition. But as you age, some of these expenses may become less relevant or be covered by savings.<\/li>\n<\/ol>\n

    Lastly, when you are ready to begin the purchasing process, there are a few things to keep in mind:<\/p>\n