Does Financial Planning Also Include Life Insurance Decisions?
Most think financial planning includes tax, debts, cash flow, asset management, and other aspects. But comprehensive strategies also take care of a critical ingredient like life insurance. The experts believe that without considering insurance, no financial planning can ever be fully-proof. After all, it helps you care for those who financially depend on you or need your support. They can be spouses, parents, and kids. One may wonder what policies they should choose and how. Since your needs evolve with time, you cannot rely on broad-based perspectives. You have to be specific about your choices after doing a comparative study.
Does this sound too much? That’s why companies like Harding Financial Group offer comprehensive guidance in money and investment matters. Before this, let’s figure out the different components that can lead you to your choice of coverage.
Person’s age
Investing in a policy at a younger age can be the best move. When you reach the age of 33 with two kids and a mortgage payment, your need will be larger now than in the future when they have grown up, and you have almost cleared your debts. It’s an expected scenario, which may or may not happen the way you presume.
Family condition
When investing in any specific coverage, you should first ascertain the number of children you have, their ages, and the things you wish to pass down. Regardless of income status, someone with one teenage kid compared to the other with four kids less than seven years of age will have different requirements. A parent of one kid will not need as much coverage as the other one. In this, you also have to account for your better half’s earnings. Suppose you both earn an equal amount of money, but your contribution toward the household is 80%, and your spouse’s 30%. Again, your need for insurance will be more than theirs.
Savings
Now, consider a situation where two people earn USD$160,000 annually. Person A uses USD$130,000 of the total earnings, and Person B USD$150,000. While one person is careful with money, the other is a spendthrift. The one who saves more may not require as much coverage as the other because of the accumulation of assets. Hence, if you and your friend earn the same amount, don’t think his policy will be suitable for you too. You have to analyze your situation before deciding on anything.
Burial expenses
Simple cremation may not cost you as much as a proper burial plan. If you wish to have a well-organized funeral after you breathe your last, you can expect the service cost to be around USD$9,000. It can be a pretty small amount than what other things cost. However, you cannot ignore it.Extensive planning will include a lot of other factors as well. Your financial advisor can take care of all these. If you do it yourself, the options of term and permanent life insurance can be enough to drive you crazy unless you have a fair idea of how this works. Still, it’s better to save your time and energy as much as possible so that you can attend to other critical matters in life, says Chiang Rai Times.
