We have no Life Insurance. How much should we have? OR We have some Life Insurance. Do we have enough?.
These are common questions we are asked every day in Peavoy Financial Planning. The New Year offers an ideal time for you to undertake a review of the level of protection you have in place for your family.
A Life Insurance need is a financial need to protect you and your dependents from the potential financial loss that can arise on death.
There are potentially three main protection needs, that can arise on the death of a parent of young children. a) Loss of Income, b) The Cost of Childcare, c) Repayment of any Loans.
These three needs are likely to be temporary as you eventually retire and your children eventually grow up and start earning for themselves, therefore it is likely that Term Insurance is the most cost effective solution to match your Life Insurance need.
At Peavoy Financial Planning we help you calculate your Life Assurance Number by taking you through four key steps. These are as follows;
- We establish your annual loss of earned income and the period for which it must be replaced
- We calculate your Life Insurance need to replace this earned income
- We deduct your existing Life Insurance that you are not using to act as security against your loans
- We give you the answer of our recommended level of Life Insurance for you.
This methodical approach ensures that the recommended level of Life Insurance is specific to each parents financial requirements.
So what do you do next?
If you are a parent, have a chat with your Financial Adviser and work out your Life Assurance number. If you would like to have a chat with me here at Peavoy Financial Planning please do make contact with me and we will work through your current situation with you. I can be contacted on 087-2902206 or alternatively by email on firstname.lastname@example.org
David Peavoy BA, QFA, LIAP is the Owner of Peavoy Financial Planning whose practice is based in Office 5b, Portlaoise Enterprise Centre, Clonminam Business Park, Portlaoise, Co Laois.
David Peavoy T/A Peavoy Financial Planning is regulated by the Central Bank of Ireland
Disclaimer: All data and information provided within this blog is for information purposes only. It should not be taken as specific advice for your situation. Peavoy Financial Planning makes no representations as to the accuracy. completeness, or suitability of any information and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its use