Introduction
Before, we determine how much life insurance you need-first ask yourself do I need life insurance? Let’s define life insurance.
What is Life Insurance? Life insurance is a contract between an insured (you) and insurance company with agreeance that a specific amount of money will be paid out to your beneficiaries (someone that you designate to receive money when you pass away) or with some policies a specific amount of money that will be paid to you with a specific terminal or chronic illness deemed by a prescribing provider. Yes, you can access your life insurance policy while still living (and I can explain further in another blog post) There are different types of life insurance:
- Term Life Insurance: Life insurance policy that doesn’t accumulate cash value, it’s simply if something was to happen to me, I want this specific amount paid out to my beneficiaries or myself. Term life insurance, also limited to a specific number of years (hint: the definition term) and after the term has ended, the insurance policy will need to be renewed or the insured will have to implement a new policy.
- Whole Life Insurance: Life Insurance with a broad umbrella and various other whole life insurances may fall under this umbrella such as indexed universal life. Whole Life is a life policy usually until age 100 and has the potential to accumulate cash value (where you can take out loans as necessary)
- Indexed Universal Life: A type of whole life insurance with cash value accumulation linked to market indexes such as S&P 500.
For this blog post, we will focus on Term Life Insurance.
Do I need Term Life Insurance?
Ask yourself these questions:
- Do I have debts or a mortgage?
- Do loved ones rely on my income?
- Do loved ones rely on me for caregiving?
- Do I have children who will require educational funding?
- Do I have children or other loved ones with special needs?
- Do I own a business?
- Would I like to leave a gift for a charity I support?
- Do I want to fund my final arrangements?
- Would I like to transfer wealth to the next generation?
If you’ve answered Yes to any of the above questions, you definitely need term life insurance! Now the answer you’re waiting for: how much? All over social media, people with no expertise or background in financial services or people who are in financial services but inexperienced and just want a client will tell you everybody needs a 1 million dollar policy, now that may be true for some but that’s not the case for everyone. (Note: the more your death benefit is, the more premium you pay monthly)
DIME Method
I’m going show you with the DIME method I specifically implement with my clients to help you determine how much term life insurance you need to ensure your children and family are taken care of when you’re gone or you and your family are taken care of during a terminal and/or chronic illness. I encourage you to take a thorough inventory of the information presented below to determine the life insurance policy’s value that makes sense for you and your family.
Debts
Mortgage: $_________________________________
Total other debts: $_________________________
Income
Annual income to replace: $________________
X number of years income needed by survivors: ______________________________
Total income needed: $____________________
Mom Roles
Total cost to replace “mom” roles: (Household management, caregiving, cooking, driving and more) $________________
Education
Future educational costs: $_________________
Other considerations
Estimated final expenses: $10,000
Planned philanthropy: $___________________
Wealth creation for next generation:$________
Let’s Engage
How has the DIME Method helped you determine how much life insurance you need? Did the method give you the clarity you were seeking?
Conclusion:
Let us pray: Lord thank you for bringing this amazing mother on this blog post. Remove any worry or anxiety from her heart and mind. Provide clarity, peace, and hope that she may desire. In Jesus name, Amen!
Verse of the blog: Proverbs 13:22 “A good person leaves an inheritance for their children’s children, but a sinner’s wealth is stored up for the righteous.”
Contact Information That May Interest You
I would love to continue our conversation. If you’re up to it, I invite you to chat with me further and let’s talk about term life insurance options for you and your family.
Booking link: https://calendly.com/speakgenwealth/45min
My name is “Kim”berly Jones, a financial advisor for mothers who specializes in indexed universal life, term life insurance, and annuities. Learn more about my brand’s mission, vision, and values at: www.speakgenwealth.com
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