Insure Your Life!

We live in a world of unknowns. In the finance world, insurance is used to offset financial risks—the risk of having your car totaled in an accident, the risk of your house flooding or burning down, the risk of being unable to travel because you get sick, etc. Life insurance is a specific tool used to offset the risk that a primary breadwinner or homemaker dies without sufficient savings for the remaining spouse to live on.Here are some general rules of thumb for life insurance:It is best to have life insurance as long as you have someone who depends on you for income—this is typically a spouse or a child.Each breadwinner in the household should have a life insurance policy equal to ten times their annual salary or maybe more, depending on their individual circumstances.In addition to offsetting risk, the death benefit of a life insurance policy is generally paid out income tax-free—this can be a huge benefit to your loved ones after you die.If you don’t have any life insurance, I recommend you (1) reach out to your insurance agent, financial advisor, or estate planning attorney to ascertain how much you might need and (2) check out the cost of life insurance policies online or with an insurance agent.