Do You Really Need Life Insurance?

There may be a hole in your financial security blanket. Life insurance, combined with investments and retirement planning, is the foundation of a sound financial future. Yet studies show that many people don't have enough life insurance.

Life insurance has several purposes:

• To provide cash to your family after you die to pay the mortgage and other ongoing household expenses.

• To fund your children's education and other long-term goals.

• To pay estate taxes, medical bills, funeral costs and other expenses at the time of death.

• To save more for retirement.

Without life insurance, your family might be forced to sell assets in order to pay outstanding bills and taxes. Life insurance has an important tax advantage-the policy's beneficiaries pay no federal income tax on the proceeds they receive. And, with certain types of policies, any earnings that build up over time are not taxed until you withdraw them.

Who Needs Life Insurance?

You probably need life insurance if you: have dependent children or an aging parent that relies on you for support; are married with an unemployed spouse; have a significant amount of assets; own a business; or want to supplement your retirement savings.

So how much insurance do you need? One rule of thumb is to buy coverage equal to five to ten times your annual income. But that may not apply to you. Carefully evaluate your individual needs since the right amount of coverage depends on your personal circumstances.

Some items to consider in determining your insurance needs:

• Your age and stage in life.

• Your salary and net worth.

• The number and age of your dependents.

• Your dependents' likely income needs in the event of your death.

To better assess how much life insurance you need, fill out the worksheet located on our Web site:

If your employer offers a group life insurance program, it's wise to take advantage of it. Many companies pay for basic group coverage, such as term life insurance. Term life insurance, which lasts for a specific period of time, pays benefits to your survivors if you die during the policy period. Another kind of basic coverage-permanent insurance-provides lifelong coverage as long as premiums are paid and combines a death benefit with a savings feature.

Life insurance helps provide your family with financial security. That's why it's important to make sure you have the right amount of coverage.

For 150 years, Aetna has been providing for the insurance and financial needs of individuals and businesses. More than 10 million people nationwide are covered by Aetna group life insurance plans. Ann L. Bryan is vice president for Aetna Group Insurance, a division of Aetna in Hartford, CT

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