What Lies Ahead?
Crafting an Effective Tomorrow Begins with the Right Inquiries Today
By Alicia Wanek | Staff Writer
I frequently found myself doubting my decisions. Whether pulling out of a dealership, finalizing paperwork, or making an agreement, I often questioned if I had made the right choice. However, I’ve come to realize that thorough research and asking the appropriate questions beforehand allows me to move forward confidently. Ensuring that your family is secure after your passing is undoubtedly a significant life choice. With the right guidance, you can feel assured that your insurance policy will meet your needs. Local independent agent Bobby Davidson provides a comprehensive “360 review” to assess your unique situation from all angles. He proposes the following “Top 10 Questions” to consider as you navigate what type of policy—or policies—you should acquire.
- Are you a homeowner or a tenant?
This primary inquiry involves discerning whether you should pursue a permanent or term policy. Typically, permanent policies are more advantageous, as they build cash value over time and are fully secure against creditors, also offering a tax-free death benefit. On the other hand, Bobby notes that “a term policy does exactly what its name implies,” providing coverage for a specified duration, much like renting. These policies are usually more budget-friendly, making them suitable for temporary needs, like when your children attend college. “If a permanent policy is financially out of reach, consider obtaining a term policy as a minimum,” advises Bobby, who frequently hears clients express regret over not purchasing more coverage when they were younger.
- Is it wise to secure my child’s future insurability by obtaining a policy for them?
While it may not seem necessary now, obtaining life insurance for children early provides assurance that they will have access to coverage, should they later face a health issue that renders them uninsurable.
- What is my current financial status?
Take into account your salary, savings, and investments. Understanding your financial situation will help you determine the appropriate size of the policy you’d need to complement your existing resources.
- How would my family cope financially if I were not around?
Reflect on whether you are leaving them in a secure position. Bobby encourages consideration of other financial resources they may have access to.
- What costs are associated with raising and educating my children?
From daily living expenses to childcare and college tuition, the total can accumulate rapidly.
- What amount of insurance does my spouse require?
Consider your partner’s employment situation and whether they would continue working following your absence. Bobby also asks, “Would you like them to maintain their current standard of living?”
- What might I inherit in the future?
“For many, this amount generally won’t significantly sway life insurance decisions,” Bobby points out, but if you anticipate a sizable inheritance, this should be taken into account. Additionally, it may necessitate establishing a trust to mitigate estate taxes.
- What is the “time value” of money?
Consider: “Do you believe $1 million has the same value now as it did in 1970? How about 30 years from now?” Bobby emphasizes that rising costs for essentials like housing, food, and education will necessitate consideration of inflation in your planning.
- Which agent can assist me in locating the right policy?
Seek someone you can trust who can present you with various options. An agent like Bobby, who offers assistance in evaluating your choices, is an excellent option.
- How have my life circumstances evolved?
It’s critical to reassess your insurance needs at least every couple of years, as changes in your life may require more or different coverage.
For added details, reach out to your insurance agent or contact Bobby Davidson at 972.980.4884 for a free 360 Review*.
* Regulations regarding life insurance protection (cash values and death benefits) vary by state, as do rules about beneficiary designation. It’s essential to review the specific laws in your state.
