If you were offered life insurance for free and simply needed to indicate how much you wanted, what would your answer be?  It is free and the company just wants to know how much.  Would you calculate how much your family would “need” or would the answer be more aligned with what you would “want” for your family?  Remember, in this hypothetical situation, it is free.  Would you approach this considering what your family would “want” or only what they “need”?

 If you could find a way to spend the value of the death benefit without dying would your answer be any different?

Here is the question we seek to find an answer to in every plan we do:  What role can life insurance play within the overall objective of increasing long term wealth and reducing overall risk? 

During your accumulation phase of life, insurance needs to be viewed in part by how much of your income you would want to continue coming to your family if you died prematurely.  When you move from the accumulation phase during your working years, to the distribution phase during retirement, how will your insurance needs change?  In a micro sense, you might not “need” it any longer.  Do you drop it then? 

Properly designed and engineered, life insurance death benefits can in fact provide opportunity for you to enjoy an increased amount of retirement cash flow compared to a strategy absent any life insurance. 

From a macro perspective, the existence of life insurance during retirement years provides great flexibility and freedom to spend more of your net worth than you might be comfortable doing without insurance.  If life insurance is going to be used to your complete advantage, it must be in place on the date of death.  Otherwise, the life insurance company wins and you lose.