The main purpose of life insurance is to provide resources at your death for someone who depends on you for either monetary or other personal support. Few of us like to think about these issues, but the proper and creative use of protection planning strategies to minimize exposure to risk is something even fewer can afford to ignore.

Estimating your needs:

While the calculation of your insurance needs can be quite complex, resist focusing solely on the income that would be lost at your death. Instead consider the actual needs and lifestyle expenses of those you wish to protect.

Types of  Insurance:

Another factor to consider when purchasing life insurance is which type works best for your specific needs. There are two basic types, Term and Permanent.  Neither is the solution to all needs, but each has its appropriate uses.

Insurance and Estate Planning:

Many people with larger estates will use life insurance to fund a Irrevocable Life Insurance Trust to transfer wealth and provide liquidity needed to protect their legacies from the erosion of estate taxes.  This type of trust aims to help preserve assets because the death benefit is not subject to estate taxes or income taxes and can be used to pay needed taxes while keeping personal property intact. 

Conclusion:

The proper use, amount and types of insurance policies, along with their respective cost, terms, restrictions can be confusing. Seek the advice of a professional before proceeding with any of these strategies. We believe the most accurate way to properly analyze ones insurance needs is through the comprehensive planning process. If you would like learn more about life insurance needs please contact us at 678-546-3747 or e-maill us at mark.demaine@lpl.com