May 10, 2014
What’s your biggest asset? Your home? Your car? Many Americans don’t realize they have failed to protect their biggest asset: their income.
When you do the math, the money you will earn before retirement is probably more significant to your family’s financial well-being than the value of your home or car. What if your family’s income is unexpectedly disrupted due to a death in the family?
According to a recent survey , Americans are $1.2 million short on average when it comes to protecting their income with life insurance.
Do the math
Consider an individual who makes $50,000 a year with plans to retire in 30 years. This person is likely to earn at least $1.5 million before retirement. Assume this individual has $300,000 in life insurance coverage. While this may seem like a lot of money on the surface, it is approximately $1.2 million less than what this person would have earned for the family. In fact, $300,000 in coverage replaces just six years of income for the surviving family. When the life insurance money is exhausted, the family’s income will be reduced by $50,000 a year for 24 years. If this person’s family can’t generate new income, they will almost certainly be forced to adjust their standard of living.
More affordable than you may think
The good news is that life insurance is cheaper than most consumers think. The cost for a healthy 35-year-old to purchase a $1.5 million 20-year term life policy may be less than $65 per month. That’s enough to erase or at least greatly reduce the average income replacement gap, and it’s less than many people pay to insure major assets like their home or car.
Contact our office about what you can do to reduce your income replacement gap. We offer a free life insurance calculator to help consumers figure out how much coverage they need!
Give us a call. (508)947-3460!!