Sometimes life just happens. One day things can be going smoothly when the next you're thrown a curve ball. Since no one knows what the future holds, taking steps to put a financial safety net in place will provide you with peace of mind knowing you are prepared for when the unexpected happens.
"Most of us are feeling some sort of financial strain today, so it makes sense to examine our budgets and look for ways to increase our savings whenever possible," says Michael Immel, board president with the National Association of Insurance and Financial Advisors in Madison. "However, life insurance is one of the few guarantees that can ensure your family's financial plans remain on track. It is often overlooked, but should be the foundation on which any financial plan is built."
A recent study by the nonprofit LIFE Foundation found that a majority of Americans (85 percent) agree that most people need life insurance, yet 95 million adults today do not have coverage or the financial safety net it provides.
In fact, one third of all Americans (33 percent) believe they do not have enough life insurance, including one quarter of those who already own a policy.
"The simple rule of thumb is, if someone depends on you financially you need life insurance," says Immel. "Even if you have coverage now, it's important to review your policy at least once a year to ensure it still meets your needs and is enough to protect your loved ones."
September is Life Insurance Awareness Month, making it the perfect time to take stock of your life insurance needs and meet with a qualified financial or insurance advisor who can walk you through your options.
To help you get started, Immel offers three tips for evaluating your life insurance needs:
? Step 1: Get a sense of how much is right for you - Determine how much money your family will need to cover immediate expenses and how much they will need over the long-term to maintain their standard of living or fund future plans, like college. To figure out the right amount of coverage to fit your needs, begin by thinking about everyone who depends on you financially, including your spouse, children, parents or other loved ones. For help getting started, visit the insurance needs calculator on the LIFE Foundation's website at www.lifehappens.org/howmuch.
? Step 2: Educate yourself about the different kinds available - Life insurance policies exist for virtually every need and budget. Determining the type that suits you best depends on a number of factors, such as how long you need coverage, how much you can afford, how much risk you can tolerate and how much flexibility you need. Explore the different types of life insurance available, including term and permanent policies, by using the interactive product selector tool at www.lifehappens.org/whatkind.
? Step 3: Don't go it alone - Life insurance is one product where an expert's opinion can make all the difference. Once you've established some of the basics, work with an insurance agent or other financial advisor you trust who can conduct a thorough needs analysis to ensure that all of your needs will be met. One way to find a good insurance agent is through recommendations from friends and family or other professional advisors, such as attorneys.
"Life Insurance Awareness Month is the ideal time for a life insurance review," says Immel.