IN Shaler Summer 2017 - Page 19

INDUSTRY INSIGHT LIFE INSURANCE SPONSORED CONTENT HOW MUCH LIFE INSURANCE DO YOU NEED AND WHAT TYPE? I ndustry experts recommend having life insurance coverage of 5 to 10 times your salary. To many of us, that sounds like a lot of money! But after taking a closer look you may realize that it can actually be a pretty conservative estimate. SOME OF THE CONSIDERATIONS 1. Replacing salary in the home. One of the most basic approaches to determining life insurance is to figure out how much you need to last a certain number of years when your salary won’t be coming in. This involves calculating a person’s “time to retirement” and how much money he/she is projected to earn in the next 5, 10, 15, 20 or more years. Another way is to estimate the household yearly expenses and multiply that by the number of years you’ll need coverage. This is a fairly straightforward way of doing life insurance calculation. 2. Living on interest. There’s another interesting idea that a lot of experts have put out there: the idea that with a large enough death benefit (what the policy pays out), a family would be able to live on the interest of the death benefit for a long time. For example, a death benefit of $1 million would generate $50,000 per year from a 5% interest rate. Evaluate the current stock market, trust fund and investment fund opportunities to see if there is an investment opportunity that would give something close to 5%. After adjusting for market circumstances, you can figure out how your household might achieve capital gains on the proceeds of a life insurance policy that’s roughly even with the projected salary. 3. Age of dependents. The age of your children/dependents should factor into your coverage. For example, if your dependents are 15 and 17 years old, you may only want a few years of coverage. On the other hand, those with younger children will want policies that provide for a much longer time. As you can see, when it comes to life insurance, there’s a lot to consider. If you’re going to do it, then do it right and get the amount you need. After all, that’s just what this is—insurance and assurance that your loved ones are properly cared for. The Anthony Passarelli Insurance Agency wants to help you. Please call us at 412.385.4091 or stop by at 1312 William Flynn Hwy. in Glenshaw where we’ll assist you in making the decisions that are best for you and your family. This Industry Insight was written by Anthony Passarelli, owner of the Anthony Passarelli Insurance Agency. It is Anthony’s mission t V7W7FW'2ƖRRf@FR&W7B6fW&vRf"W"VVRVVG2R2v&V@FW'6ƗRB6ƖgFR7W&6R&6W72FvfPRFRvVFvRRVVBFRW"FV66F76&Vƒ2FRvVFvRBWW&V6RFVR&WGFW"VFW'7FBW"6fW&vRF>( FWFRƖfR&VFW'2'W6W727W&6RB&R6W"7VW"#r6w26p