September is Life Insurance Awareness Month. Sadly, Financial Planning only gets a day and it’s different in each state. That’s just not fair! But life insurance is important for your family goals, so here are the important things to consider before buying life insurance.

1. Review Your Life Goals
   Most of us have goals that we’d want to make sure succeed, even if we are not there. Taking care of our family’s wellbeing, getting kids through college, getting the house paid off, becoming debt free - these are some goals for your family and not just personal. You’d probably want them to happen even if you passed away. Business owners also need to consider how to help their partners and family continue running the business without you.
2. Determine How Much Insurance You’ll Need
   How much of the family income do you provide? Who else depends on you? How will your family pay final expenses and repay debts after your death? Add up those amounts to decide how much coverage you need, for how long, and what you can afford to pay. If you need help, ask for help from your insurance agent or financial advisor.
3. If You Already Have Some Current Life Insurance
   If you already have a life insurance policy, is it enough for you needs? Do you need more? Maybe you need less if your kids are out of school and your house is paid off. Should you replace the current policy? By the way, never cancel an existing policy until you have received the new one. Sometimes there are surprises when applying for a new policy - such as health changes - that affect both your cost and ability to get approved.
4. Compare the Different Kinds of Insurance Policies
   There are two basic types of life insurance: term insurance and permanent insurance. Term insurance generally has lower premiums while you are ‘younger’ and will be gone when the policy period is done whether it is for 10,years, 20 years or however long your policy states. Permanent life insurance may be one of several types: whole life, universal life and variable life. Your choice should be based on your needs now and in the future and what you can afford. Permanent Life insurance will remain throughout your whole life (as long as you pay the premiums).
5. Be Sure You Can Afford the Premium Payments
   Before purchasing, be sure that you can handle the insurance premium payments. Can you afford the initial premium? Will your income continue to afford the policy if your business revenue or other income goes down?
6. Have an Insurance Agent Help You Evaluate the Future of Your Policy
   If you are buying insurance that builds up cash, have your agent check how quickly the cash value grows. Some policies have low cash values in the early years that build quickly later on. Other policies have a more level cash value build-up. Ask your agent for a year-to-year display of values and benefits.
7. Keep Your Current Policy
   It is important that you do not drop one policy and buy another without thoroughly understanding the new policy and the one you have now. It is not possible to reinstate a policy once canceled.
8. Understand Renewal Policies
   You can renew most term insurance policies for one or more terms even if your health has changed. Each time you renew the policy for a new term, premiums may be higher. Ask what the premiums will be if you continue to renew the policy. Also, ask if you will lose the right to renew the policy at a certain age.
9. Read Your Policy Carefully
   Do premiums or benefits vary from year to year? How much do the benefits build up in the policy? What part of the premiums or benefits is not guaranteed? What is the effect of interest on money paid and received at different times on the policy? These are all questions that you should be able to answer by asking your agent, calling the company, or thoroughly reading your policy.
10. Review Your Life Insurance Plan Every Few Years
    How will inflation affect your future needs? Do you need more insurance when your family size increases? Do you need more now that your business has grown? Review your policy with your agent every few years to keep up with changes in your income and needs.

That’s it. Consider yourself aware for life insurance awareness month! Still don’t know what’s right for your family? Call, click or contact me at 610-628-2055, Merra Lee.net and merralee.moffitt@lpl.com.

Merra Lee Moffitt, CERTIFIED FINANCIAL PLANNER™ Professional (CFP®), is a Senior Partner at Good Life Financial Group, Wyomissing. She loves helping business owners and other families grow their financial independence. She helps her clients keep work/family balance while they pursue lifetime financial success. It’s part of her financial planning process.