Life insurance is such an enigma to most people. They know they need it to help prevent financial devastation to loved ones, but they don’t always know how much or what type of life insurance plan they require. But with the help of an experienced life insurance agent a family can get a clear picture of their financial needs if one member of the family should pass away.
The One Year Plan - A Band-aid on an Open Wound?
In most small to large business a group life insurance plan is usually offered as part of the benefit package. The amount of life insurance is usually an amount equaling one year of salary, with some plans offering buy-up options in increments of $10,000. But is a year’s worth of salary enough to help a family who has suddenly lost not only a loved one, but an important financial contributor to the household? Usually not.
The Long Term Picture
It is surprising to many couples, even ones without children, just how much life insurance may be required to replace years of lost income. There may still be 25 years left on a 30-year mortgage to pay on a house. Couples with children realize that college expenses must be paid somehow, not to mention the child raising expenses that must be paid until they reach college age.
Life insurance is not a plan to make a beneficiary rich after a loved one passes away, but merely a means to replace the years of lost income when sudden tragedy strikes. It is not surprising to discover that a life insurance plan for $500,000 may be necessary for average middle income families. Higher income families may even need $1 million or more.
When it comes to tragedy, there is no replacement for the life of a loved one. But the right life insurance plan can help give peace of mind to families who may otherwise face financial tragedy as well.
Tags: financial devastation, group life insurance plan, life insurance, life insurance agent, life insurance plan