Life insurance isn’t for those who have died—it’s for those who are left behind. When shopping for life insurance, consider needs such as replacing income so your family can maintain its standard of living, as well as paying for your funeral and estate costs. A general rule is that you should seek coverage between five and seven times your gross annual income. As far as the various types of policies go, they can generally be placed into one of two categories: term and permanent.
Term insurance generally provides coverage for a specified period of time and pays out a specified amount of coverage to your beneficiary only if you die within that time period. In a level premium term policy, you pay the same amount of premium from the first day of the policy until the term ends. A permanent insurance policy, on the other hand, will stay permanently in effect for the rest of your life so long as premiums continue to be paid.
You may be able to use time to your advantage when investing for wealth accumulation.
The longer you invest, the more potential your money has to compound interest. If your portfolio has not fully recovered from losses in recent years, you may wish to consider a more aggressive allocation to make up for lost ground and get back on track to accumulating wealth.
However, with fluctuations in the stock market, it is important to remember that more conservative retirement strategies typically have only a portion of the assets invested in the stock market. Allocations can be set aside for more conservative investments and/or secured* income contracts such as annuities. Annuities are long-term vehicles designed to generate supplemental income during retirement. They have minimum guarantees backed by the strength and claims-paying ability of the issuing insurance company. After all, the last thing you want to do is lose more ground during the next market correction.
*Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing carrier.
Because the market does not provide security, you may want your financial strategies to include some guaranteed* income products. For example, annuities, which are insurance products with guarantees*, can provide a source of supplemental income throughout your retirement.
Twenty-first century asset protection may require more than just strategic asset allocation. Including products like annuities in your retirement income strategy can help protect* your money from declines due to market losses.
Diversifying your retirement assets among a variety of vehicles— both through insurance products and investments depending on what is appropriate for your situation—may help you meet your retirement income goals throughout your lifespan.
*Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.
Your investment advisor is not permitted to offer, and no statement contained herein shall constitute, tax, legal or accounting advice. You should consult a legal or tax professional on any such matters.
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