Your Life: The biggest financial asset most
people have is their own income. Imagine the
worth of a lifetime of your income, or even ten
years of it. How much life insurance you’ll need
will depend of how many people depend on that
income. The less savings you have the more life
insurance you will need. In terms of how much
insurance you will need - you should purchase
as much as you can afford to replace the lost
income you will lose if the primary income earner
passes on.

An Example: Suppose John is the head of a
household of four people and he is the only
income earner in the family. He makes $60,000
per year. Let’s say this is just enough money to
take care of his family’s expenses and save a
small amount. In this case John would purchase
enough life insurance to replace all his income
or come as close to that as possible. He needs to
purchase a policy that will pay at least 5 times
his annual income, or $300,000. This money can
be used directly to replace his income. The
amount not used immediately can be invested to
provide additional future income.

If one is not the primary earner in a family, or if
the family has significant other income or assets,
less insurance may be needed. An example:
Joan makes $40,000 a year, but her husband
also works, and he makes $30,000. So, if we
consider how much life insurance she needs
alone, she will not need to replace the family’s
entire income stream, only her own. Let’s say the
family also has $120,000 in savings. While this
savings may be considered retirement savings
in part, it may also represent additional financial
security. She can take this into account when
purchasing insurance. She may still want to buy
5 times her income amount, or $160,000,
depending on the cost. However, she doesn’t
need to replace her husbands income.

In any given life insurance scenario, one should
also take into account any other income you
may have coming in the future which may
replace your current income, such as social
security benefits, etc. Also, if your children are
nearing ages where they may become self-
sufficient, you should take that into

Life Insurance Products: There are several
different types of life insurance products. The
most common are Term Life insurance and
Whole Life insurance.

Term Life Insurance: With this type, one pays a
given ongoing premium, and the payout upon
death is fixed. The insurance is in force and the
premium stays the same for a given period of
time or term - hence the name. Upon death the
face value of the policy is paid to the beneficiary.
No investment value builds and the policy must
be renewed at the end of the term. This is
generally the most affordable type of insurance.
The amount of the premium will vary, of course,
depending on your age. The older you are the
more expensive will be the premium. Of course,
this principle is true regardless of the type of life
insurance. For most people term insurance is the
recommended option.

Whole Life Insurance. This insurance has two
features; first is life insurance, where a premium
is paid and a given payout is paid upon the
death of the policyholder. The other feature is an
investment vehicle where part of the premium is
invested, and allowed to grow tax deferred, until
the payout of the policy - either upon death or
cancellation of the policy. One big drawback is
that if one discontinues payment of the policy or
cancels the policy early, there are substantial
penalties which seriously deplete the underlying
earnings previously built up. Whether this option
is for you depends on whether you know you
will hold the policy for a very long time (+ 20
years) and whether you have maxed out other
tax deferred savings vehicles.

Auto Insurance: Auto Insurance is less
complicated, and also highly regulated by law. If
you've taken out a loan to purchase a car, your
bank will also require insurance on your vehicle.
Generally, there are two aspects to insure when
shopping for a policy.

The first is to buy enough protection to replace
or repair the car should it be damaged,
destroyed, or stolen. This is know as
collision/theft insurance. If you are in an
accident, you’ll want to have your car repaired,
bringing it back to it’s original condition with the
least amount of payout from yourself. This
insurance, less a deductible, will do that.

The second aspect is for protection against any
medical or death payment claims incurred by
yourself or those with which you have an
accident - know as liability insurance. . So, for
example, if you are in an accident, and the other
party sues you for $100,000 in medical bills, this
insurance is available to pay any approved
claim. So it’s a good idea to buy a level of liability
to cover the maximum amount you can afford,
especially given the level of assets you have. A
certain amount of this insurance is mandated by
law - it is to your advantage to buy significantly
more to protect your assets.

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Have Questions? Our consultants are available to help you with any
financial question. We can also provide in-depth consultation
concerning any financial issue facing you. We can help. Please
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Have Questions? Our consultants are available to help you with
any financial question. We can also provide in-depth consultation
concerning any financial issue facing you. We can help. Please
Have Questions? Our consultants are available to help you with any
financial question. We can also provide in-depth consultation
concerning any financial issue facing you. We can help. Please

1) We can answer any general financial questions. Our
consultants are available to help you with any financial
issue facing you.
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products/ services:
a) mortgage loans: purchase, refinance, 2nd mortgages
b) credit consolidation
c)  other credit: credit cards, auto loans
d)  business loans

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It’s important to make sure that you are
protected financially against unforeseen
circumstances. It may mean protecting your
income on which your family depends. Or
protecting your property that would be
prohibitively expensive to replace. The
fundamental decision about whether to have
insurance is how much is financial stream or
asset worth and what resources do you have to
replace it. If it would be overly burdensome to
replace then you need insurance. Of course,
there are also certain legal and contractual
requirements to have insurance for housing and
autos, etc. So, assuming you need insurance,
we need to identify the assets to protect and
their worth. And how much of value do you
need to protect?