Feb 5, 2021
In this episode of Inside the
Plan with the 401(k) Brothers, Bill Bush and Andy Bush, advisors at
Horizon Financial Group, talk about why getting life insurance is
an act of love. They share insight into what goes into a term life
insurance policy, how to estimate what you need from a policy, and
- Double check that your beneficiaries are
correct on your plan, especially if you’ve gone through a life
transition like a marriage or divorce.
- The primary beneficiary is the first in line
and the contingent beneficiary is next in line.
- You can also split between your beneficiaries
- Bill and Andy suggest term life insurance for a
certain period of time where the premium and death benefits are
consistent over that period.
- To figure out how much life insurance you need,
look at your income as a starting point.
- A typical guideline is that it’s 12x your
income, but that may not be enough; the factors that go into it
change over the course of your life.
- Think about whether you have young children, if
there are debts your spouse will need to eliminate, if higher
education costs are a factor, and how much income your family will
need to derive from this.
- Main factors in the cost of your premium are
how old you are when you buy it, the term of the policy, what the
death benefits are, and your health.
- It’s possible that eventually you’ll be able to
accumulate enough wealth that you won’t even need life
- Life insurance could give you liquid assets if
other assets are tied up in investments or tax policy.
3 Key Points:
- Make sure the beneficiaries on your life
insurance policy are up to date.
- Consider all the factors that may impact how
much of a death benefit your beneficiaries might need, including
debt, lost income, children, etc.
- There are benefits to a life insurance policy
beyond financially sustaining loved ones.
- “Understand, if you’re buying it on your life,
you’re not gonna be here if that thing gets enforced. So it’s
really not for you, it’s for the ones you love.” –Bill and