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    Back to Basics with Life Insurance

    Life insurance should be a part of everyone's financial plan. Whether you are young and healthy or more seasoned with a family, life insurance offers peace of mind and protection for your loved ones. While it may not be comfortable to think about our inevitable death, as the old saying goes, the only thing certain about life is death and taxes!

    1. It's not just for the married with children

    While life insurance is typically something that people start to seriously think about when they get married or become parents, single people can also reap the benefits of having a policy. The younger you are, the more you can benefit from lower premiums. Because statistically speaking, young people are further away from death. As such, insurance companies typically consider younger individuals a lower risk and in turn, the premiums are older than those individuals closer to the expected mortality age (i.e. older). Likewise, if you opt for a whole life insurance policy, you'll have the opportunity to lock in a reduced life insurance rate and keep it over time as well build up cash value which you may access in the future.

    2. Proceeds are typically income tax free

    In most cases, the proceeds from life insurance benefits do not have to be reported as gross income. If you've ever browsed through your Facebook feed, you have likely seen Go Fund Me accounts set up to help cover funeral expenses in the unfortunate situation of someone's untimely death to help cover funeral expenses. These type of accounts typically take around 5% of donations through processing and other fees, reducing the actual amount that the beneficiary will receive. Life insurance is a financially savvy way to maximize your beneficiary's benefit amount and can be a smart inheritance tool.

    3. Stay-at-home partners need life insurance, too

    If you or your significant other stay at home, it can be easy to think that the "non working" person doesn't need a life insurance policy since no actual paycheck is received; however, this is a common misconception. If you were to tally all of the daily tasks a stay-at-home individual performs and consider the cost of "outsourcing" those tasks, you may be surprised by the monthly total. Compound that on an annual basis, and you'll quickly see just how critical a life insurance policy for a stay-at-home partner can become. According to a recent survey by Salary.com, the median annual salary of a stay-at-home mom was more than $162,000!

    4. Life Insurance is Less Expensive Than You Think

    Many of our monthly discretionary expenses actually cost more than a standard term life policy for a healthy individual. Particularly at this time of the year when many families are focusing on saving money and trimming their budget, it's easy to find expenses that can be trimmed or reallocated to a life insurance policy to provide your family with security. On average, a healthy, 30-year-old male can get a 20-year, $250,000 term life policy for approximately $160 a year, or about $13 a month. Here are a few things that typically cost more than $13 a month:

    • Unused gym memberships

    • Subscription boxes (Hello Fresh, Stitch Fix, Bark Box, etc.)

    • Gourmet coffee

    • Going out for lunch

    • Date nights

    Fortunately, in order to purchase a life insurance policy, you don't have to completely change your lifestyle or eliminate all of the things that you love. If Hello Fresh is your thing, keep on keeping on, but maybe cut back on one date night per month to make room in your budget for your life insurance premiums. Likewise, if you absolutely can't live without your Starbucks latte, consider cutting back on something else. It's all about balance and thinking about the long-term effects that small decisions today can have on your family's future!

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    Joan Cleveland, CLU, ChFC, REBC

    Joan Cleveland, CLU, ChFC, REBC leads SWBC Life Insurance Company as President and CEO. With more than 30 years of experience in the life insurance industry. She holds her Agent licenses for Life, Accident, Health Insurance, and has multiple FINRA securities Licenses. Joan is a frequent industry speaker and media spokesperson. She is a member of the Board of Directors of the Consumer Credit Insurance Association, the Texas Association of Life and Health Insurers, as well as the Life Insurers Council. In addition, she is chair of LIMRA’s Strategic Marketing Issues Committee.

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