Life insurance, once a cornerstone of estate planning primarily for estate tax purposes, continues to be a crucial tool for providing financial security to loved ones in the event of your death. Despite the diminishing impact of estate taxes on families due to generous federal exemptions, the importance of life insurance remains undiminished. It's imperative to assess your life insurance needs regularly, considering the evolving circumstances of your life.
Reasons to Reevaluate
In addition to the estate tax exemption amount, consider reevaluating your insurance coverage if you’re:
- Getting married
- Getting divorced
- Having children
- Approaching retirement
- Facing health issues
Each of these milestones alters the financial landscape, potentially increasing or decreasing your family's financial obligations and dependencies. The right amount of insurance depends on your family’s current and expected future income and expenses, as well as the amount of income your family would lose should you pass away.
For instance, marriage and parenthood introduce new financial responsibilities, including childcare, mortgage payments, and educational expenses. As children grow and become financially independent, your financial obligations may shift, but healthcare expenses could rise with age. Retirement marks another significant transition, where income sources change, debts may still linger, and the need to provide for dependents remains a priority.
Given these dynamic life changes, it's vital to periodically reassess your life insurance needs to ensure you're neither underinsured nor overburdened with unnecessary coverage. Our expertise can guide you through this process, evaluating your current circumstances and aligning your life insurance coverage with your evolving needs and goals. Remember, proactive review and adjustment of your life insurance coverage can provide invaluable peace of mind for you and financial security for your loved ones.
HoganTaylor Wealth
HoganTaylor Wealth provides an integrated approach to investment and financial planning and is a registered investment advisor and subsidiary of HoganTaylor LLP. HoganTaylor Wealth takes pride in serving clients as an independent fiduciary through holistic financial planning. Learn more at hogantaylor.com/wealth.
INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.
