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Life insurance can make a difference for your financial future

By sbup Staff

Life insurance is an important part of any financial strategy. But it is just as important to make sure you buy the right amount of coverage. 

Life insurance is often overlooked for the simple reason that most people do not like dealing with their own mortality. But accidents happen and it is important to know that you would leave behind enough money to provide for your family.

"If you neglect your insurance needs, you're just hoping the worst doesn't happen," says Daniel D'Ordine, a certified financial planner with New York City-based Life and Wealth Planning. "And that never really works."

Even if you're young and healthy, it is a good idea to consider life insurance. According to D'Ordine, there are two reasons to get life insurance: "If you die and you leave debts to be paid, or, more commonly, if you have dependents and you need to replace your income." If you meet either of those two criteria, it makes sense to consider how much coverage you'd need.

Experts suggest buying coverage equivalent to eight times your gross income or 20 times your take-home pay. But those numbers largely depend on your needs and specific situation. For example, while a $500,000 policy might seem like enough to cover the income needs of a single parent, it won't if the money first has to pay off a $300,000 mortgage and $50,000 worth of student loans.

D’Ordine advises adding up what you need the money to cover. That includes existing debts such as a mortgage and car loans, future expenses such as high-school and college tuition for your children, and enough money to replace your income until your spouse is able to retire. There are restrictions on how much coverage an individual can purchase—usually based on salary and the risks associated with lifestyle—so it's important to carefully think through the potential expenses.

Also, recognize that higher coverage means a higher premium. Just as it doesn't make sense to buy insufficient coverage for your needs, it can also represent a drain on your resources to buy too large of a policy.

Start your search for the right life insurance policy at's Insurance Center ( Just answer a few questions related to your age, your health and your lifestyle to receive quotes on a number of different policies.

As with most financial products, it pays to shop around. Just make sure you shop for the right amount of coverage for you, your obligations, and your loved ones.

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