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Top Five Reasons to Consider Life Insurance

Lisa Quist
Educational Opportunities: 
Grain, Dairy, Swine, Beef, Timber, Young, Beginning Farmers
Home > Education & Events > September 2018 > Top Five Reasons to Consider Life Insurance

If you have a successful farm operation or a young family, purchasing life insurance could be one of the most important decisions you will make on behalf of your family or business. According to the 2019 Insurance Barometer Study, 43% of Barometer respondents don’t own any life insurance at all, and of the respondents that do own life insurance, 18% only own group life insurance through an employer. There are many important facts to consider when deciding how much life insurance coverage you may need. Each family and farm operation is different, so it is important to have a discussion with an life insurance professional to ensure you are getting the coverage that is best for you.

Unpaid debts: Farm mortgage, loans, and credit cards will eat into your death benefit amount, potentially leaving your family with very little left over to take care of other expenses.

Funeral expenses: A traditional North American funeral has an average cost between $7,000 and $10,000.

Current income replacement: Your death benefit should replace your current income so that your family can carry on with life without having to make major lifestyle changes. The standard is having ten times your annual salary in life insurance coverage. Don’t forget to factor in the needs of the business with this calculation.

Additional expenses: If you were to die, your family would surely have additional expenses to replace the services you used to take care of yourself. If your spouse is currently a stay at home parent, your family may need the services of a nanny or babysitter if they need to return to work. Will the farm operation need to hire additional laborers to get all the work done?

College education: If your children are young, you may want money set aside for their college tuition. It is important to remember that life insurance is not for you; it is meant as a way to financially provide for your family after you are gone.

It’s not pleasant to think of your own demise, but we all need to prepare. It is important to be ready with life insurance anytime there are people relying on you. Would your current life insurance coverage be enough to cover your final expenses, income replacement, and debt payoff?

Talk to an insurance professional today to determine the right type and amount of coverage for your farm and family.
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