“How much life insurance should I have?”

That is a short and direct question. There is, however, no simple or definitively right answer that can be as concisely summarized in a simple formula or rule of thumb. We at Breadwinners’ Insurance, in fact, know and recommend that you are most likely to reach your own best answer to this question in conversation with someone who: 1) understands you – your financial and family situation, your personal and business responsibilities, and your and your loved ones’ goals and concerns – and 2) has genuine knowledge of this subject and extensive experience discussing it.

Whether you are approaching the subject from the perspective of the insured individual or a beneficiary, assessing someone’s needs for life insurance is, after all, a subject that can lead to a whole series of interrelated financial and ‘personal philosophical’ questions. That is, after one gets past the natural inclination to avoid this subject and its potentially emotionally-laden concern. Moreover, given that this is a subject one seldom addresses, it can hardly be surprising that many individuals have fascinating combinations of strongly held preconceived ideas, pervasive misconceptions, and technical ignorance about this subject. Unfortunately, many of the preconceived ideas lead to either seriously over-estimating needs or drastically under-estimating such, serious mistakes in both cases. And, the misconceptions – which often arise from a personal or philosophical perspective premised upon some basic but faulty info - can often only be effectively addressed in an individually-tailored presentation or personal conversation.

Many “needs assessment” calculators can be found on the internet or from other sources, such as life insurers or financial planning software packages. It is easy to plug-in a monthly income or budget figure, an interest rate, a tax rate, and presto out will pop the calculator’s assessment for you. We use a variety of calculators ourselves. However, we only use them with a keen knowledge of their limitations. Some of the internet tools are blatantly flawed to over-estimate one’s needs for life insurance. Often they ignore very important real-world factors or cannot be readily modified to incorporate unique personal circumstances. Sadly, and with similar harmful consequences, even many who do not sell insurance and claim to provide objective advice make recommendations that terribly underestimate or overestimate another’s needs.

Very briefly, the typical family can use life insurance to provide the financial resources necessary so that one’s loved ones are taken care of in the event that the insured individual, the breadwinner, doesn’t get the time to earn the future years of income on which the family’s plans and goals are based. We know how needs change over time, how to use resources other than life insurance, and how to incorporate many other factors in calculating needs so that needs are properly met. Good life insurance is a pretty terrific product, and we would say that even if we weren’t involved in the business. In fact, many others, such as Nobel laureate economists and Supreme Court Justices, have said as much, as has attorney Ken Feinberg, the Special Master of the 9-11 Fund, in his thoughtful and thought-provoking book, What Is Life Worth? But, as good as life insurance can be, as cost-effective or as tax-wise as a policy might be, more is not always better.

Over the past 25+ years, we have literally had thousands of conversations with clients about this multi-faceted subject of needs assessment. To all such conversations, we bring the same integrity, objectivity, knowledge, and caring that motivates our unrivaled work to bring good disclosure to all American consumers and excellent policy value and complete life insurance confidence to our clients. Our duty is to help our clients obtain excellent coverage that is the simply the right amount of coverage, for the right number of years, set-up the right way for them and their loved ones. We invite you to contact us to further discuss your own needs assessment. Also, be sure to ask us for the list of questions that can facilitate your own learning and thoughts about this vital subject.

Congratulations again on discovering Breadwinners’ Insurance. Congratulations, too, on addressing your life insurance needs and concerns. We think you’ll be very pleasantly surprised just how life re-affirming, motivational, and possibly even downright inspiring your assessment process and work with Breadwinners’ Insurance could be.