At SPF Insurance, we view life insurance as a key part of your financial plan. All the planning and preparation will be worthless if something unexpected happens and derails your plan.
The key protection pieces of a well-structured financial plan are:
Life insurance is a key part of the umbrella of protection that your family needs. For more information about financial plans, contact our office.
What we’ve been trying to determine on this page is what type of life insurance you need. The graphic below is our model of how life insurance should be set up for the average person.
As a child, your need for life insurance is minimal. If something happened to you, your parents will pay for your funeral, or they could take out a small policy on you to provide monies for a funeral.
Once you are independent, your need for life insurance will have several focus points in time. These life changing events are good times to review your insurance coverage.
Getting married, means that you and your spouse are legally bound and your “single” lives and debts are now equally shared. Having protection to provide for each other becomes important. This coverage should last until you are both ready to retire.
Having a baby is another life changing event. Besides the complete shift in your lifestyle, you now have long term financial commitments to provide for your child’s (or children’s) well-being and future. If either of you is gone, those financial commitments may be difficult to maintain. For children, you typically need this coverage until they leave school, so 20 to 25 years is the right period of time.
Buying a home is typically the biggest investment you will make. The loss of income, due to disability or an unexpected death, may make keeping the home impossible and result in the remaining family members having to move. Home protection should last until you’ve paid off your mortgage. This typically 30 years.
As shown in the diagram, getting married, having a baby, and buying a home are best protected by getting a term life insurance policy. As these events occur you can add additional term policies, or replace an existing policy with a larger (or smaller) policy.
Later in life, if you have been following a financial plan, you will retire and the need for a large life insurance policy will be reduced. However, you will need to able to protect against potential long-term care needs, and you may want to provide a legacy for your children/grand-children, or provide monies to take care of estate taxes.
These types of needs can be provided by a permanent policy. Once your children are independent and your household cash flow has increased, you can begin increasing the amount you put into your permanent policy to increase the death benefit and LTC benefits.
For more information about how to do this, please contact one of our SPF Insurance advisors.
Use our life insurance planning tool below to determine what type of life insurance you need. This tools asks you a series of questions and then provides a detailed recommendation about what to use for your life insurance needs.
Now that you know what type of life insurance you need, you are ready to take the next step and determine what health rating you will get if you apply for life insurance.
SPF Insurance provides service throughout California including these cities:
Los Angeles, San Diego, San Jose, San Francisco, Fresno, Sacramento, Long Beach, Oakland, Bakersfield, Anaheim, Santa Ana, Riverside, Stockton, Chula Vista, Fremont, Irvine, San Bernardino, Modesto, Oxnard, Fontana, Oceanside, Escondido, Carlsbad, Temecula, El Cajon, Vista, San Marcos, Encinitas, Solana Beach, Imperial Beach, National City, La Mesa & Ramona
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