Life insurance may be one of the most important purchases you'll ever make. It certainly is one of the cornerstones of a solid financial plan. If someone will suffer financially when you die, chances are you need life insurance. Life insurance provides cash to your family or others after your death. This cash (known as the death benefit) replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding. What's more, there is no federal income tax on life insurance benefits. In the business context, it may provide funds to help your partners whether a reduction in firm income due to your loss.
Most Americans need life insurance. To figure out if you need life insurance, you need to think through the worst-case scenario. If you died tomorrow, how would your loved ones and business associates fare financially?
In deciding how much coverage is needed, consider what may be needed to pay for your final expenses (e.g., funeral costs, medical bills, taxes, debts, lawyers' fees, etc.)? Would you be able to meet ongoing living expenses like the rent or mortgage, food, clothing, transportation costs, healthcare, etc? What about long-range financial goals? Without your contribution to the household, would your surviving spouse be able to save enough money to put the kids through college or retire comfortably?
The truth is, it's always a struggle when you lose someone you love. But emotional struggles don't need to be compounded by financial difficulties. Life insurance helps make sure that the people you care about will be provided for financially, even if you're not there to care for them yourself.
Now that I know I need life insurance, where do I go to get it? As a solo or small firm practitioner your time is valuable. Looking for the right insurance plan for you takes time. An important feature of your ABA membership is access to the insurance plans sponsored by the American Bar Endowment, including Term Life Insurance. The ABE will assign you a Personal Insurance Representative who will walk you through the various options, show you how to use its simple on-line needs assessment tool to determine how much life insurance you need, quote you rates and provide you with the right application to complete for coverage. The ABE even has a dedicated Solo/Small Firm toll-free number so you can talk to a Representative that understands your special insurance needs.