Get Income Protection Now, Before Tragedy Strikes

Sara Faitelson

By Sara Faitelson | March 27, 2018

My mom has had breast cancer twice, so I know what it’s like to get news that instantly changes your whole life. Thankfully, my mom survived, and my dad was also prepared for the worst by having a life insurance policy on my mom. Even though she had retired years earlier to care for my brother who has special needs, my dad understood that losing my mom would require him to quit work to take over in caring for my brother.

Having life insurance in place before tragedy struck our family gave my dad peace of mind, to know that if something happened to her, he had enough money to keep the house going and hire somebody to take care of my brother while he worked.

Millions of Americans are faced with these sorts of life-changing situations every year, and I hope my story brings awareness to the importance of making sure that you have all of your income protection needs in place now, before tragedy strikes. Make sure you’re putting away enough money in an emergency fund. Get life insurance on yourself and your spouse, and double-check your coverage every five years to make sure it is keeping up with your needs – new house, new kids, higher income, what have you.

One rule of thumb on coverage is to make sure there is enough money to get your kids through college as well as to pay off the mortgage on the house and to cover any other ancillary debts you’ve incurred. That’s the expense method of figuring out how much coverage you need: Look at how much you are spending per month, and then make sure you have enough money to last until the kids are out of college. Another approach is to look at income replacement: How much money will you bring home over the course of your working life? That is a very large number, and losing the income will have a huge impact on your family. Even if you aren’t working, your loss will have a financial impact on your family, as was the case with my mom. Take time to be prepared, now.

My father was always a big believer in life insurance, but he only bought term insurance at the time. After my mom’s breast cancer diagnosis, I remember my dad pulling me outside the room and asking if my mom’s life insurance was okay. Even though he had planned for this, it was only when the crisis struck that he truly understood how essential income protection was. He realized that his life had changed forever. I assured him that everything was fine for now, but we quickly took advantage of our ability to convert my mom’s existing term policy to permanent insurance. I always tell people to buy permanent insurance as early as possible because, if not, you may end up in the same situation as my father. He needed insurance in place on my mom but, because of her illness, she was no longer insurable. He was fortunate enough to be able to keep the insurance she had in place past the term because he was able to convert her term policy to a permanent policy.

I also convinced him to convert his term life insurance policy to a permanent policy. When a family member died and left him some money, I insisted he use some of the money to convert his policy. He did so reluctantly back then, but now he tells me he’s glad he converted his policy. With a special needs kid who will need to be cared for long after my mom and dad are gone, my parents needed permanent insurance.

It can be painful to plan, and it’s easy to put off dealing with it until later because there are always other expenses you need to pay, but I guarantee that your future self will thank you for putting protection in place now.

You never know when your life will turn upside down or when you’re going to get that phone call. That’s why it’s so important to sit down with your financial professional, do a full review and make sure that your family will be financially secure in case the unexpected happens. It’s bad enough that people have to deal with personal tragedy, but it’s heartbreaking to see someone struggling with financial difficulties on top of it.

Life insurance policies are subject to certain eligibility requirements and/or restrictions, and may not be right for everyone, but it’s something to consider as you contemplate your future. A trusted adviser can help you determine if life insurance can help with your financial plan. All guarantees are based on the claims paying ability of the issuer.

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