Monthly MFS Tip: Life Insurance


Life Insurance Awareness Month (Logo): Copyright © 2016 Life Happens |

Guest Blogger: Andrew Horowitz, CFP, Horowitz & Company, Inc.

How much life insurance should you have? Do you even need any at all?

As you grow older, it’s important to revaluate your need for life insurance. When you are single you may not have a great need, but when you are married with children that all changes. Even after the kids are grown, there may be a need to protect the household income if you or your spouse suddenly passes.

There are several ways in which you may be able to determine the “right” amount of life insurance. Back in the “old days” the rule of thumb was to simply take your annual income and multiply it by 10. Nowadays, as interest rates are at historic lows, that just won’t cut it.

A better way is to add up your living expenses, subtract retirement income and use a multiplier that is aligned to the current interest environment. Then look at your savings and retirement plans and other assets that may be used to provide income for the surviving spouse and child(ren).

The problem is that there are many unknown expenses that occur over time. Missing any of these may lead to an underinsured situation. The good news is that Compass Rose Benefits Group members have access to financial tools, such as the Life Insurance Calculator from Mission Financial Solutions, which can help you figure out how much insurance is appropriate for your situation. Click Here to try the calculator—start planning for your financial future today!

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