Life Insurance | Boizelle Insurance Partnership - Part 2

How Much Life Insurance Do You Really Need?

Some people equate life insurance with tragedy and death. In truth, life insurance is for the living. Without it, the sudden demise of a key breadwinner could leave a family stranded without the resources to maintain their lifestyle—or even retain their home.

Not so long ago, professionals recommended that families carry a life insurance policy with a death benefit of 10 times their annual household income. Today, however, in light of rising house prices in many parts of the country, spiraling college costs and low interest rates most advisors now recommend up to 20 times your household income.

Unfortunately, most American families are underinsured. The gap between what households have and what they need is nearly $320,000, according to LIMRA’s study Closing the Life Insurance Gap, 2015.

If you’d like to get a working idea of how much life insurance you may need (or how much more you may need), you can use our quick Life Insurance Needs Calculator.

A Cornerstone of Your Financial Plan

Life insurance is a cornerstone of your financial plan, for these reasons.

  1. It provides income replacement. For most people, their most valuable economic asset is their ability to earn a living. If you have dependents, then you need to consider what would happen to them if they could no longer rely on your income. A life insurance policy can also help supplement retirement income, which can be especially useful if the benefits of your surviving spouse or domestic partner will be reduced after your death.
  1. It covers outstanding debts and long-term obligations. Without life insurance, your loved ones must shoulder burial costs, credit card debts, and medical expenses not covered by health insurance using out-of-pocket funds. The policy’s death benefit might also be used to pay off a mortgage, supplement retirement savings, or fund college tuition.
  1. It can be used for estate planning. The proceeds of a life insurance policy can be earmarked to pay estate taxes so that your heirs will not have to liquidate other assets to do so.
  1. You can use it to support a charity of your choice. If you have a favorite charity, you can designate some or all of the proceeds from your life insurance to go to this organization.

Remember, Boizelle Insurance can help you determine what coverage is right for you and your family. Give us a call today to get started.

Originally Posted by: Marvin H. Feldman, Life Happens

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6 Scary Insurance Misconceptions

There are lots of spooky things about Halloween. Just a few include ghosts, goblins and the unfathomable: running out of Halloween candy.

Not many people add insurance to this list, despite the fact that a coverage gap could leave you and your family in serious financial trouble.

Read on to learn about six of the scariest insurance misconceptions and how you can protect yourself.

Six Scary Insurance Misconceptions

  1. Your home insurance policy automatically includes flood and earthquake insurance.

Insurance companies can’t cover floods and earthquakes at reasonable rates since they tend to be so devastating. Fortunately, there are options for both risks. Earthquake coverage is typically offered as an endorsement while the federal government offers flood coverage through the National Flood Insurance Program (NFIP). It’s definitely worth considering since people who live outside of high-risk flood areas file more than 20 percent of NFIP claims. What’s more, just one inch of water can cause major damage to your home.

  1. Your homeowners and personal auto policies will cover you if you use them to operate a small side business.

Your homeowners and personal auto policies may not adequately cover your business activities. If you operate a home-based business or another small business, explain your situation to your insurance agent. He or she can advise you about any additional coverage you may need.

  1. Your homeowners policy will automatically replace your lost or damaged items in today’s dollars.

There is a big difference between actual cash value (ACV) and replacement cost. ACV reimburses you based on how much an item is worth after factoring in depreciation. Guaranteed replacement cost is much better: with it, your policy pays the cost of rebuilding or repairing your home or replacing your possessions without a deduction for depreciation.

  1. Only millionaires need a personal catastrophe liability (PCL) policy.

Anyone can be involved in a serious accident. Most of the time, incidents are caused by simple negligence like forgetting to lock the fence surrounding your pool before a child finds his way to it.

Accidents of this nature have the potential to cause financial catastrophe to people of any financial means. Without proper coverage, you could also lack the resources to compensate someone for their injury and hardship.

  1. I’m not responsible if my friend wrecks my car.

If your car is involved in an accident, it’s your responsibility since you granted permission for someone to use your car. So your insurance will cover the damage, and the accident will go on your insurance record. This could result in a higher premium. The lesson? Limit how much you loan your car—and only choose trustworthy drivers.

  1. You only need life insurance if you have kids.

Parents—both those who are employed and stay-at-home—aren’t the only ones with a need for life insurance.

Does anyone else (like a parent) depend on your income? Then life insurance is probably a good option for you. Do you own a home with someone else? If so, could the surviving partner carry the full load of the mortgage? Or maybe you simply want to leave money to your favorite charity or relative. It’s also wise for business partners to take out life insurance on each other so they could afford to purchase a deceased partner’s outstanding shares.

There’s no need to fear a potential coverage gap. Simply give Boizelle Insurance Partnership a call. We can tell you about affordable options that give you the protection you need. Don’t worry–we won’t try to sell you ghost insurance (a real insurance coverage).

By: Amanda Prischak, Erie Insurance

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