This is the third and final post in our series about life insurance for commercial real estate professionals. Whether you’re a commercial real estate broker, landlord rep, corporate real estate rep, or work in any other CRE role, determining how much life insurance coverage you need goes hand in hand with determining what type of life insurance coverage you need. A life insurance needs analysis is a key component of a thorough financial plan.
What Is A Life Insurance Needs Analysis?
A life insurance needs analysis helps determine both the type and amount of coverage that fits your situation. And like all good financial planning, it doesn’t begin with spreadsheets—it begins with your values and goals.
The key question is simple: What do you want life insurance to accomplish for the people you leave behind?
Here are some of the questions that often guide this conversation:
- Do you want the kids to be able to pay for college without student loans?
- Do you want your family to avoid having to sell your house or other assets?
- Do you have a child with special needs who is going to need ongoing financial support?
- Is it important for you to leave a certain amount of money for your children or grandchildren?
- Do you want to leave money for a charity?
- Do you need insurance to help cover estate tax obligations?
- And many more.
Once you clairfy what you want the insurance to do, then you can determine how much life insurance you need, and what type of insurance you need.
Clearly, the more you want the insurance to do, the higher the coverage you need. And if you need certainty of coverage due to the commitments you have made, then you may need whole life insurance instead of term life insurance.
Life Insurance Need vs. Affordability
Understanding how much and what type of life insurance you need is essential—but so is making sure you can afford it.
Life insurance becomes more expensive as you age or develop medical conditions. When you’re young and healthy, coverage is relatively inexpensive, but you may not yet know what needs you’ll have later in life.
As with many financial decisions, choosing life insurance when affordability is a constraint comes down to your values, your priorities, and your judgment. There are no universally “right” answers. A skilled financial advisor can help you explore your options and make a decision that aligns with your goals and your budget.
Our Approach
At Dominion Financial Advisors, we do not sell life insurance. As part of our comprehensive financial planning process, we perform a life insurance needs analysis to determine which types and amounts of coverage are appropriate for your situation. As fiduciary financial advisors, we don’t receive commissions, referral fees, or kickbacks for life insurance. Our only goal is to ensure you receive the best advice we can offer.