Let Insurance Protect Your Family’s Lost Income
Life insurance is an amazing fiscal tool when used properly. The good news is that life insurance has multiple applications which can make a huge difference to you and your family’s financial well-being. Few people realize the versatility of life insurance and how it can be a powerful solution in different scenarios. In the following scenario, a family decides to inquire about how to use life insurance to protect the family in case the primary wage earner is either incapacitated or dies prematurely. The purpose is to provide sufficient resources for an appropriate length of time for the surviving spouse and children. This requires an analysis to calculate the “human life value” of the primary earner, the person being insured, as a way of understanding how much tax-free money the family will need each year. The calculation will determine the minimally necessary guaranteed income to sustain the surviving spouse and children should their life be financially disrupted with the death of the insured. Once this minimal sum is known, the family can then decide whether they want to insure the primary provider’s life for an even higher amount. The process starts by first knowing the minimum insurance the family should purchase. As odd as it may sound, insuring the value of a human life uses the same risk management principles as when insuring assets. The insured has an economic...
Read More