Life Insurance as a Key Element of Financial Planning

Investments are only one part of a long-term financial strategy. Insurance can be just as critical. Without proper protection, an unexpected death could cause a financial plan to collapse.

When thinking about their financial futures, many people focus solely on their investment strategy. The questions that they most often ask have to do with how they will reach their financial goals for retirement, college for children, and other long-term needs.

Life insurance is a cornerstone of financial planning because investment plans usually assume that you will live to your life expectancy so that your income will continue to be generated until retirement. But what happens if there is no income because of the death of a breadwinner? How will your children fund their college education? How will your spouse live in retirement? What happens to the assets you've accumulated if there is no insurance to cover everyday expenses?



Life insurance can be an important addition to any financial plan designed to help your family meet current or future needs. Life insurance can help cover immediate expenses and can provide long-term protection of the assets you've earmarked for your family's future. For example, insurance will help pay for final expenses, such as unpaid medical bills, funeral expenses, and estate settlement costs. Also, life insurance can help provide the money to meet the ongoing costs of running a household—without dipping into savings and depleting assets needed for the future.

The death benefit proceeds from a properly structured life insurance policy received by your beneficiary are generally free from federal income tax and can help put the children through college and continue building a retirement nest egg for loved ones.

Keep your insurance up to date with your changing needs.

It's not enough to buy a life insurance policy once and forget it. As our lives change, we need to reevaluate our insurance coverage to ensure that it continues to meet changing needs.
Consider:

• How long ago did you buy your life insurance? Were your family circumstances different?
  
  
• Have there been changes in your family's income, savings, debt, or financial goals that could impact your insurance coverage needs?
  
  
• If you have term coverage, what is the duration of the coverage? Will it be long enough to provide protection until your children are through college? Will it help protect your spouse's retirement assets?
  
  
• Do you anticipate any significant changes in your financial situation?
  
  
• Have you reviewed your insurance in light of your long-term savings goals?
  
  
• Who is your beneficiary? Is this who you want to get the proceeds today? Can this beneficiary manage the cash provided by the life insurance?

As you consider these questions, take time today to review your present life insurance coverage. Talk to your financial professional about reviewing your existing coverage to determine if it is adequate to help ensure a sound financial future for your family.

AXA Advisors, LLC, does not provide legal or tax advice. Please consult your tax or legal advisor regarding your individual situation.

About the Author:

Lou Nuchereno is an executive vice president and manager of AXA Advisors' Buffalo branch and offers securities through AXA Advisors, LLC, 325 Essjay Road, Suite 308, Williamsville, NY 14221, member NASD, SIPC, and offers annuity and insurance products through AXA Network, LLC, and its subsidiaries. He can be reached at 716-626-2507. Life insurance is issued by AXA Equitable Life Insurance Company (New York, NY) and by various unaffiliated carriers.