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Rebar to Cement Your Financial Foundation

You're working your tail off to build a solid financial foundation for family.  You now have some home equity, personal savings, investment and retirement accounts.  You may even own an investment property.

You’re doing everything in your power to create a secure and comfortable lifestyle for yourself and family.

So, let me ask you, have your really thought about how much you earn?  I mean, if nothing changed about your current income, what would it provide for your family between now and when you retire?

Here’s another way to think about it.  The table below shows your future earning power until age 65 at various ages and income levels.

Lifetime Earning Power by Age and Income

Regardless of your age or annual income, that’s a lot of earning power.  So, what are you doing to protect your earning power for your family?

You said life insurance, right?  Of course you did.

Now, let me ask you what is the first thing that comes to mind when you think about life insurance? 

Chances are it’s not "do I have enough" or "should I have more of it."  If you’re like most people, you probably don’t think much about it – you have higher financial priorities (e.g., saving for retirement, paying for college, paying off debts).

When you do, you probably think you already pay too much for insurance as it is -- auto, home, health…argh.  (Confession time: I don’t like paying for insurance either.  I’d rather spend the money for something more pleasant.)

Still, I was surprised to learn that 72 percent of American households that earn over $100,000 think they have enough or too much life insurance.1

More surprising was the average amount of life insurance owned is $166,800.2  That covers just over one and half years of income for someone earning $100,000 a year.  That’s not a lot of reinforcement protection for your income.

While life insurance is a subject no one really wants to think about or talk about, it is a sensible solution to a very difficult question:

How will my family manage financially and replace my monetary contribution if I die prematurely? 

If someone depends on you financially (e.g., children, grandchildren, parents), it's one subject you cannot avoid.

For the majority of us, life insurance is the only solution that can protect our families from financial catastrophe and having to make drastic cuts to their future plans and lifestyle if a breadwinner dies.

Next time, you'll see how having adequate life insurance protection can help ease the burden and provide your survivors with greater financial peace of mind.  


1. LIMRA and LIFE Foundation 2015 Insurance Barometer Study.
2. LIMRA, Person-Level Trends in U.S. Life Insurance Ownership, 2011 

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