What Lies Ahead?
Crafting an Effective Future Plan Starts with Insightful Questions Today
By Alicia Wanek | Staff Writer
I often found myself doubting my decisions. Whether it was when I drove away with a new car, finalized paperwork, or said goodbye to someone with a handshake, I would start to wonder if I had made the right choices. However, I have come to realize that thorough research and asking myself key questions allow me to move forward with assurance. One significant decision that requires careful consideration is ensuring your loved ones are safeguarded after you pass away. If you have guidance to help you pose the right questions, you can feel confident in selecting a policy that suits your needs. Bobby Davidson, an independent local insurance agent, provides what he dubs a “360 review” to assess your unique requirements comprehensively. He recommends the following “Top 10 Questions” to help you identify the appropriate insurance policy or policies for you.
- Are you a homeowner or renting?
This primary question determines whether you need a permanent or term policy. Generally, permanent policies tend to be more beneficial as they build cash value over time and are safeguarded from creditors, often including a tax-free death benefit. Conversely, Bobby notes that a term policy is precisely what it sounds like; it offers coverage for a specified duration, akin to renting. These policies are typically more affordable, making them suitable if you need temporary additional coverage, like during your children’s college years. “If a permanent policy isn’t feasible for you, at least opt for a term policy to get something in place,” Bobby recommends, emphasizing that insurance premiums increase with age, and clients frequently express regret over not purchasing more coverage when they were younger.
- Should I secure a plan for my child to enhance their insurability?
Though life insurance for children might not seem pressing now, obtaining coverage early ensures they retain access to life insurance later on, should they encounter health issues that render them uninsurable.
- What is my current financial status?
Take stock of your earnings, savings, and investments. This assessment helps you determine the size of the policy you may require to complement what you currently possess.
- How would my loved ones manage financially in my absence?
Reflect on whether you are leaving your family in a secure financial position. Bobby encourages you to consider other means of financial support they might have available.
- What are the costs associated with raising and educating my children?
Account for everything from daily living expenses to childcare and college tuition; the total can be substantial.
- What financial resources does my spouse require?
Examine whether your partner is employed and their likelihood of continuing to work if you were no longer available. Bobby questions, “Would you like them to sustain their current lifestyle?”
- What is my potential inheritance?
Bobby states that for many, any expected inheritance may not significantly impact their life insurance choices, but if you are set to inherit a considerable sum, this aspect becomes relevant. Additionally, there may be a need for a trust to mitigate estate taxes.
- What is the “time value” of money?
Consider whether you believe that $1 million holds the same value today as it did in 1970 or what it will be worth in 30 years. Bobby warns that costs for essentials like housing, food, and education will rise with inflation, so you must factor this into your planning.
- Which agent can assist me in selecting the right policy?
Seek out someone you trust who can present you with various options. An experienced agent like Bobby can help you navigate your choices effectively.
- How have my circumstances evolved?
It’s crucial to reassess your needs periodically, ideally every few years, as your insurance requirements may change based on your personal life.
For further details, reach out to your insurance representative or contact Bobby Davidson at 972.980.4884 for a complimentary 360 Review*.
* The laws governing life insurance protection (cash values, death benefits, and beneficiary designation) differ by state. It’s advisable to review the relevant legislation in your state.
