What’s Ahead in Your Future?
Planning for Tomorrow Necessitates the Right Questions Today
By Alicia Wanek | Staff Writer
I used to constantly doubt my decisions. Anytime I drove off a car lot, finalizing a contract, or sealed a deal with a handshake, uncertainties crept in, making me question if I had made the right choice. However, I have come to realize that as long as I do my research and ask the right questions ahead of time, I can make decisions with confidence. Ensuring that your loved ones are supported after you’re gone is undeniably a significant life decision. With the right questions posed, you can find comfort in knowing you’ve chosen the policy that suits your needs. Bobby Davidson, a local independent agent, conducts what he calls a “360 review” to assess your specific requirements from every angle. He recommends these “Top 10 Questions” to help you figure out which type of policy—or combination of policies—you might require.
1. Are you a homeowner or a renter?
The key consideration here is whether a permanent policy or a term policy is more appropriate for you. Typically, permanent policies are advantageous as they build cash value over time and are fully protected from creditors, often accompanied by a tax-free death benefit. In contrast, “a term policy is just what it sounds like,” Bobby explains. It provides coverage for a set duration, much like a rental. These policies tend to be more affordable, making them suitable if you only need additional coverage temporarily, such as while your children are in college. “If a permanent policy is out of reach, at least secure something by opting for a term policy,” suggests Bobby, noting that insurance premiums rise as you age, and clients frequently express regret for not buying more coverage when they were younger.
2. Should I secure my child’s insurability by obtaining a policy for them?
While it may not seem crucial now, acquiring life insurance for your children early on ensures they have access to coverage in case they later face a health issue that makes them uninsurable.
3. What is my current financial situation?
Evaluate your income, savings, and investments. This assessment can help you determine the size of the policy you may need to complement your existing financial resources.
4. How would my family manage financially if I were no longer here?
Reflect on whether you are leaving them in a stable position. Bobby advises considering what other financial resources they might have at their disposal.
5. What are the expenses associated with raising and educating my children?
Take into account daily living costs, childcare, and educational expenses, as these can accumulate rapidly.
6. What financial support does my spouse require?
Consider your partner’s employment status and whether they would continue working if something were to happen to you. Bobby questions, “Do you want them to maintain your current lifestyle?”
7. What is the potential inheritance I might receive?
Bobby mentions, “For many of us, this amount may not significantly impact our life insurance decisions,” but if a considerable inheritance is expected, it should be part of your calculations. Additionally, establishing a trust might be necessary to avoid estate taxes.
8. What is the “time value” of money?
Contemplate this question: “Do you believe $1 million has the same value now as it did in 1970? What about in 30 years?” Bobby stresses that expenses such as rent, food, and tuition will increase over time due to inflation, which needs to be factored into your planning.
9. Which agent can assist me in selecting the right plan?
Choose someone you trust who can present you with various options. It’s beneficial to work with an agent like Bobby who can guide you through your choices.
10. How have my circumstances changed?
It’s essential to assess your needs every few years, as your insurance requirements may increase or decrease based on your individual situation.
For further information, consult your insurance agent or contact Bobby Davidson at 972.980.4884 for a complimentary 360 Review*.
* Life insurance protection laws, including cash values and death benefits, and beneficiary requirements vary by state. It is advisable to review the specific laws in your state.
