A Matter of Life and Death

June 12, 2019

Estate planning isn’t exactly glamorous. But like other aspects that make up the ‘roof’ of your financial home, life insurance is essential to protecting your family and the wealth you accumulate.

Then again, purchasing a new roof isn’t very exciting either. But how are all of your beautiful rooms and fancy gadgets going to weather decades of rain, sleet, snow and hail? Like the interior of a home and all your valuable belongings, your savings and investments are only as safe as the roof above them.

I find many clients shocked at the thought of the recommended amount of Life Insurance to acquire.

To help my clients understand the significance of life insurance, I ask the following:

  • Would you ever drive a new car off the lot without full coverage?
  • If you were diagnosed with a chronic illness, would you downgrade your health insurance to save a few bucks?
  • And what about your home – would you insure the first floor, but not the second?

The answers are obvious, right? The approach to your life and legacy should be no different. If you pass away tomorrow, you want your family to be able to maintain the same lifestyle for decades (not days!) to come.

Life insurance plays a significant role in succession planning. But I also believe it is one of the most valuable assets in retirement.

There’s one more important point to consider.

Before purchasing a policy, always calculate your Human Life Value*. This oft-overlooked method helps determine a true, realistic amount your loved ones will need to stay afloat without you by using factors such as your age, income potential, growth of earnings, the period of time needed to support your survivors, and more.

Adhering to our ‘Protect first’ motto means covering your income with a ‘full replacement’ mentality. Before exploring any other opportunity, implement a balanced protection program that anticipates every potential source of financial hardship.

Your stylish Suburban deserves indemnity. But so do the dearly departed.

*The HLV Theory states that one should maintain life insurance equal to the present value of all of their expected future earnings. Life insurance companies place limits on life insurance available to consumers based upon this formula and have created age-based multiples of current income as a guideline.

 


 

Series contributor: Simon Friedman

Partner, Friedman Associates

Before joining BFG over a decade ago, Simon Friedman amassed years of family insurance and financial services experience under his legendary father, Samuel D. Friedman. His belief that protections are ‘the basis for all wealth’ has inspired countless clients to build solid foundations before acting on their ambitions.

 

Simon Friedman is a Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Brooklyn Financial, which is the doing business as (DBA) name of Guardian Distributors, LLC, is an Agency of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Simon J. Friedman Associates LLC is not an affiliate or subsidiary of Guardian.

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