September Is Life Insurance Awareness Month

Every September, parents help their children get ready for the new school year.  Part of that planning also should include a review of their family’s life insurance. Here at Proudfit Insurance, we would like to remind all of you that now is the perfect time for parents to make sure they have taken steps to protect their family’s financial future by having proper life insurance coverage in place.

Life insurance protects you and your family in many ways. One of the great benefits is that in most cases, your beneficiaries will not have to pay any income tax on the death benefits. Life insurance can be purchased to help cover:

• Income replacement for survivors – life insurance can provide the necessary funds for the survivors  of the insured to be able to maintain their current lifestyle
• Estate Creation – life insurance creates an immediate estate. This is especially important for young families that are getting started and have not yet had time to accumulate assets.
• Estate Conservation – life proceeds may be used to pay state inheritance taxes and federal estate taxes so that is not necessary to sell off other assets to pay these costs
• Unpaid medical bills & final expenses like burial costs
• Unplanned or emergency expenses
• Mortgage balance
• Future education funds

There are more than 2,000 companies selling life insurance in this country. Some are very good, financially solid companies; others are not so sound. In general, it’s wise to stick with companies that are rated ‘A’ or better by most rating organizations. Given today’s economic landscape, a company’s financial strength is vitally important to you because, hopefully, no one is going to collect on your life insurance for a long time.

So how much life insurance do you need? It depends. Typically 8 to 10 times your annual salary would be the minimum amount of insurance you should have to protect your loved ones. If you have lots of debt, business obligations, or several children, that formula can increase to as high as 12 to 15 times your annual income.

Two other quick points:

1) Life insurance can’t be taken away once you’ve got it. BUT you may not be able to afford it or get any protection if you become ill before you apply (diabetes, heart disease, cancer, etc.).

2) The world’s financial ‘flu’ infects the life insurance industry too.  Rates and fees are rising.  You can lock in your costs now with one of several top-rated companies. Term life insurance rates can generally cost less than a bottle of water a day.

Our agency is here to advise and sell you all the insurance products to protect your family—not just home, car and business insurance.  Life insurance is a critical piece to your family’s security. Remember that life insurance is not for the dead….it’s for the loving people we leave behind. Please call me anytime. I’d be happy to discuss life insurance with you and help answer any questions that you may have.