Thinking About Life Insurance? Consider These Factors

Benjamin Franklin famously said, “In this world, nothing can be said to be certain, except death and taxes.” I am also pretty certain that leading with a life insurance conversation shouldn’t be your go-to strategy in a socially awkward setting — unless, of course, silence is the outcome you seek. And yet, based on what we know to be certain, how should we initiate a necessary conversation about life insurance?

I understand the myriad of reasons that create inaction — from cost to complexity to discomfort, etc. With that said, I recently read a quote that caught my attention:

“You don’t buy life insurance because you are going to die, but because those you love are going to live.”

Yes, I suppose this quote should be on every insurance agent’s coffee cup; however, read it again. Initiating a conversation about life insurance doesn’t require a series of complicated questions or complex algorithms to determine optimal outcomes. It simply requires a life event of importance to you.

After all, the foundation of any comprehensive financial plan originates with what is important to you. We plan based on what we know today — and then, of course, life happens along the way. In fact, let’s consider this conversation in the context of the “Game of Life” — no really, the board game. Spin the wheel, move three spaces and where do we land next?

life-insurance-considerations

Marriage

I vow to initiate a conversation about life insurance. This may or may not, in itself, generate a life insurance need; however, from current debt obligations to income replacement to potential funeral-related expenses, it’s important to understand what lies down the road when considering life insurance as part of your comprehensive financial plan.

Children

This certainly changes life. A conversation about growing your family has the opportunity to cover many potential areas of importance to you, from mitigating financial disruptions — such as paying off the mortgage — to funding education to spousal income replacement. The ones you love will live — so how do you define and fill a gap?

New Business

Think it’s time to be your own boss? Then it is also time to have the conversation considering the perils of such. For instance, what will happen to your business or your family if you pass away? It’s a difficult reality to imagine — but at the same time, it’s imperative to have a plan for protecting these valuable assets before it’s too late, which is where a life insurance conversation can potentially come into play.

Estate Tax/Estate Liquidity

Success in the “Game of Life” — or wealth accumulation — is another reason for the life insurance conversation. Once again, start by defining what outcomes are important to you. For instance, you may want to preserve your hard-earned legacy for the next generation. This exercise can allow for a conversation about which planning tools, such as life insurance, are best-suited for you within the context of your goals and objectives.

The Key Takeaway

“If you can’t be with the one you love…” OK, that’s probably not an appropriate theme song to reference here. What is appropriate, however, is this piece of advice: try not to let an initial life insurance conversation become overly complicated, to the point of obscuring what might be simple.

Talk to an advisor about what is important to you, and who is important for you to protect. Your advisor can help you navigate through the many types of life insurance to get the right plan in place for securing what matters most to you against whatever twists and turns the “Game of Life” sends your way.

Get a jump-start on planning for other life milestones.

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Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
Scot Roche
Scot Roche

J.D., CPA, PFS | Principal, Regional Director

Scot Roche, J.D., CPA, PFS, is a Principal and Regional Director for Wipfli Hewins Investment Advisors in Rockford, IL. Scot specializes in financial, tax and estate planning for individuals, families, business owners and healthcare professionals.

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Thinking About Life Insurance? Consider These Factors

time to read: 2 min