By: Jeffrey J. Buonforte
Having a
financial plan is important no matter what earning bracket you are in. There are a number of components that make up a financial plan including: Insurance, Investment, Taxation, Retirement Planning, and Estate Planning.
Why is insurance so important? The answer is asset protection and security for your loved ones. LIMRA, a worldwide research and consulting organization, revealed an
alarming fact that today four in 10 U.S. households would have trouble paying bills if the primary breadwinner died. Today approximately 35 million U.S. households have no insurance coverage, which is attributed to the poor economy.
1 Many are forgoing life insurance in order to meet other financial obligations.
Finding the right insurance protection requires planning and there is a policy right for every family’s situation. What do you want the insurance to accomplish? Do you have children or are you planning to start a family? Are your children near college age? Are you caring for elderly parents? Is it for estate planning?
Once you have assessed your needs you can take the next step, which is to find the type of insurance that is right for you.
There are two types of life insurance – term life and permanent life:
- Term life is a death benefit only policy purchased for a specific number of years (10, 20 or 30) with fixed monthly premium payments.
- Permanent life is a policy that remains in effect your entire life, and accrues a cash value that can be used for other financial needs. There are different types of permanent life policies – whole, universal and variable.
A financial planner or an insurance specialist can help you decide the type that is best for you. Keep in mind that the primary reason for insurance is to provide a means of paying your family’s living expenses when the primary income is gone.
*Securities are offered through Essex National Securities, Inc., member FINRA & SIPC. Insurance products are offered through Essex National Insurance Agency, Inc. Neither are affiliated with Lakeland Bank.
Products are not guaranteed by the bank, not FDIC insured, not a deposit, not insured by any federal government agency, and we may lose value including loss of principal.
1 The Trends In Life Insurance, published by LIMRA study, Aug. 2010, Ownership of Individual Life Insurance Falls to 50-Year Low, http://www.limra.com/newscenter/newsarchive/archivedetails.aspx?prid=145