Income Replacement & Meeting Basic Family Needs
By Sy Alter, Chartered Life Underwriter
© 2006
In a perfect world, we’d all make enough money, have an abundant savings account and assure that our families were always protected so that if anything unexpected happened to us, our families would be safe. But unfortunately, that isn’t always the case. Which is why income replacement through life insurance, can help meet basic family needs.
Leaving a Surviving Spouse with Support
Regardless of a person’s age, profession or individual circumstances, most families at some point in their lives realize that if one or both of the breadwinners were to die, the income relied upon for support would cease. In other words, the surviving spouse would be left without financial support. And while the decision to purchase life insurance is sometimes a struggle, it is nonetheless something that should definitely be considered. Why? Because in actuality, there is a misconception about life insurance based on the fact that a number of people don’t even consider life insurance until or during a major life change such as marriage, the birth of a baby, or the purchasing of a home. But very often, there is a basic family need such as income replacement in the event that the primary breadwinner passes on.
Dependable Guaranteed Source of Income
In today’s world, life insurance is no longer considered strictly a family issue nor is life insurance just about children. Life insurance is about protection, regardless of the situation, circumstances or lifestyle. In fact, statistics show that many people purchase life insurance as a means of replacing their income. In other words, their goal is to provide their family with a dependable, guaranteed source of income.
Provide for Your Family in the Event of Your Passing
For example, if you were to die tomorrow, do you know how much cash your family would need to handle immediate expenses after death? These may include funeral expenses, legal costs, a mortgage, medical bills, etc. Unless you have sufficient savings to cover these expenses, you’d want to be sure that you had life insurance to cover these expenses. When considering your family’s needs, you should be thinking about how you would want to provide for your family in the event of your death.
Sufficient Income & Maintaining a Standard of Living
Basically, it all comes down to making sure your survivors are okay in the event of your death. When considering income replacement, be sure the amount of income is sufficient towards maintaining your family’s standard of living. And if there are children involved, you may want to consider whether your spouse would earn enough to care for the children or possibly even send them to college. You may also want to consider producing an income stream, which is a lump sum of money invested at a certain rate of return. Income can be distributed or withdrawn frOm this insurance fund for a specific number of years.
About the Author:
Mr. Sy Alter is a Chartered Life Underwriter and a veteran insurance professional with more than three decades of experience in the life insurance arena. Mr. Alter specializes in areas of insurance, estate planning, buying and selling insurance, deferred compensation and corporate benefits. He maintains a solid track record of success working closely with families, doctors, lawyers and high profile individuals and businesses. Mr. Alter has also developed a lofty level of expertise providing life coverage to individuals with health impairments ranging from by-pass surgery, hepatitis, diabetes, sleep apnea as well as various types of cancers and other maladies. Mr. Alter has been guest speaker at the Financial Executives Institute as well as many other professional meetings and conferences. As Chairman of Spectrum Direct, he is available for consultations and speaking engagements and can be contacted by e-mail at salter@spectrumdirect.com or by phone at 949.600.7901.
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