Dollars and Sense: Making sure you and your family have enough of the right life insurance

RENO, Nev. (KOLO) - Life insurance is one of the most important types of life insurance you can have, but about 40% of Americans face some kind of gap in their insurance which can leave families members in a bind should a loved one die.

Edward Jones financial advisor, Ashley Hicks, explained that many employer-based life insurances don’t offer adequate coverage.

The following information is gathered from Edward Jones article: Are you properly insured?

Questions you should ask when deciding on life insurance:

• If something were to happen to you, would your family be able to continue their same lifestyle?
• Would the mortgage still be paid?
• Would your children still be able to further their education?
• How much life insurance do you need?

The answer to that last question varies on multiple factors. Even the common belief that your coverage should be worth seven or eight times your annual salary is only an estimate. Factors you’ll want to consider include your age, number of dependents, your income and that of your spouse and the size of your mortgage.

There are also two types of life insurance: term and permanent.

Term insurance provides coverage for a specified amount of time, such as 10, 20 or 25 years. Term insurance only offers a death benefit and there’s no buildup of cash value in your policy. Generally speaking, term insurance is considered to be quite affordable, especially when you’re young.

Meanwhile, permanent insurance offers a death benefit and the opportunity to build cash value. Because of this, premiums for permanent insurance which includes “whole life” or “universal life” are considerably higher than those for term life.

Life insurance should be a key component of your overall financial strategy, along with your investment mix and the long-term goals you’ve set. Insurance can even play a role in your estate planning, as you determine the best way to distribute assets to your family members and any charitable organizations you support.

These tips are from Edward Jones for use by your local Edward Jones Financial Advisor.

Ashley Hicks is a monthly contributor to Morning Break. To learn more about her services at Edward Jones, click here. She can also be found on Facebook and LinkedIn.

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