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Life Insurance: Integrating Security with Faith
Many believers want to know how to integrate faith in God’s provision with the need to provide for loved ones upon death. As we consider life insurance, we understand that it is not a substitute for faith, but an act of biblical stewardship and sound planning. Scripture frequently instructs us to save, plan and prepare to be good managers of the resources with which God has blessed us (Luke 14:28-30, Proverbs 13:11, etc.).
HOW MUCH LIFE INSURANCE DO YOU NEED?
A survey from August 2003* revealed that fewer than half of surviving spouses who received life insurance benefits described the coverage as “adequate.” Many companies recommend coverage of three to ten times the annual income based on age. While these rules of thumb are helpful guides, the brief worksheet below will better estimate your coverage needs.
WHAT TYPE OF LIFE INSURANCE IS RIGHT FOR YOU?
Generally speaking, level term life is the best value for your dollar. Most companies offer a level term premium for a specified period of years—10, 20 or 30 years. Whole life and its varieties are an option for the individual who is looking for a cash building benefit as well as a death benefit. In general, life insurance is not recommended as a retirement fund, but it is an option for those who struggle to save or invest. Credit life insurance is rarely a good value since you can usually purchase more coverage with standard term insurance for less cost.
FINANCIAL IMPACT ON SURVIVORS
The death of an immediate family member who generates income leaves a significant financial impact on survivors. If something happened to you, would your income need to be replaced to allow your family the same lifestyle? Basic ongoing expenses would still need to be met. Additional needs that may be met from the proceeds of a life insurance policy include:
• Funeral costs as well as other final expenses, such as probate fees, medical care, etc.
• Federal and state estate taxes
• Mortgages and any other large debts
• Education for your children
GIFTS
Many believers like to leave a positive impact on their local church or favorite ministries when they die. Establishing a financial gift is a wonderful way to bless ministry with your life stewardship when planning your estate. While life insurance can never replace the emotional loss experienced by death, it can provide peace of mind to survivors. Insurance doesn’t undermine faith; it’s where faith and security unite.
AG Financial Insurance Solutions
*Financial Impact of Premature Death, research conducted by MetLife, data compiled August 4-19, 2003, p. 2, 4 & 5.