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Financial Focus: Working women should evaluate life insurance needs

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Posted: Monday, July 14, 2014 6:45 am

When it comes to safeguarding a family’s financial future, there is a troubling gap between men and women. According to a survey commissioned by COUNTRY Financial, about four in 10 women say their family would not live comfortably if they died.

Additionally, around 80 percent of all married couples are dual-income couples, and more than one quarter of wives earn more than their husbands.

As a woman whose family depends on you financially, the very thought of premature death may make you worry about the changes your family would need to make if your income were no longer available. A good way to protect your family’s future is with life insurance.

Why do I need life insurance?

Life insurance provides protection from financial loss if you or a family member dies prematurely. Each situation is different, but life insurance is commonly used for final expenses, taking care of dependents and continuing business activities. Final expenses may include expenses of an illness, burial expenses, legal fees or outstanding debts.

Life insurance is especially helpful if your family exists on a single income. Life insurance helps families maintain their current lifestyles. Mortgages, college education and your spouse’s retirement are all costs that may be paid for by life insurance. Also, if you own a business, life insurance can help ensure your family or business partners will not be left with outstanding debts.

How much coverage do I need?

Although coverage amounts vary from person to person, most financial planners agree you should have at least seven to 10 times your annual salary in life insurance. It’s best to purchase life insurance early because the older you get, the more expensive life insurance gets.

Some employers provide group life insurance, but no one should rely solely on this type of coverage. Employee group life insurance protects you while you are an employee, but may disappear if you lose or leave your job. This is especially important for women, since they are more likely to leave their jobs to raise a family. Group life insurance through a spouse or previous job will generally have minimal protection.

What are the types of life insurance?

There are two main types of life insurance protection: term and permanent life insurance. Term life insurance provides protection for a specific period of time and is used to fill a temporary need, such as covering a mortgage or sending a child to college. Term insurance typically offers the greatest amount of coverage for the lowest initial premium and may be a good choice for families on a tight budget.

Permanent life insurance offers life-long protection and allows you to accumulate cash value and equity. This type of coverage is used to fill long-term needs, such as income replacement. Unlike term life insurance, you might have the option to stop making payments in later years.

Start thinking about life insurance

For working women with families who depend on their income, life insurance is too valuable to ignore. If you do not currently have life insurance, don’t wait to protect your family’s future. If you currently have life insurance, re-evaluate your needs. Examining your life insurance needs every few years is a good idea, because changes and events in your life may alter the amount of coverage you need.

• COUNTRY Financial Representative Marcia Kennedy, whose office is located at 1640 S. Stapley Drive in Mesa, may be reached at (480) 325-1521, ext. 232.

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