Life Insurance: When and why you need it (and when you don't)
Life insurance is a very important part of your financial portfolio. It can give you and your dependents the peace of mind to know that no matter what happens to you, your loved ones are taken care of. The worst thing that can happen is to leave this world behind with your family not only grieving, but also turning their lives upside down financially without your stream of income.
A few quick points on life insurance…Generally, it is only needed once you have dependents (a spouse, kids, or anyone relying on your financial support). Buying life insurance will always be cheaper the younger and healthier you are. If you recently got married or just had a child and haven't gotten around to purchasing a life insurance policy yet, make it a priority on the to do list. If for some reason you got sick or hurt, the life insurance premiums you pay could go up significantly depending on the underlying condition. How much life insurance should you purchase? Look at it this way, how much income are you potentially replacing? A million dollars will produce about $50,000/year if invested at a 5% annual return. Is $50,000 enough? Is 5% a return something you think you can achieve? These are questions to consult your financial professional with to come to a good conclusion on what works for you. There are different types of life insurance, such as Term and Whole, to consider, too. When you go home tonight and have dinner with the people you love, ask yourself if they would be financially OK without a place setting for you tomorrow night. If the answer is no, make life insurance your priority.
-Your Friends at Red Oak Financial Group