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Show Thursday, October 13, 2005 The Gunnison Valley Gazette Page 8 How Much is Enough? Another Day... Another Dollar JAYCE SUDWEEKS FINANCIAL ADVISOR How much life insurance do you need? I've heard some people say you don't need life insurance at all. Then I've heard recommendations of ten times your yearly salary. So who is right? To help answer this question, let's look at a hypothetical example. Two brothers, Thomas and Jefferson, both live in Gunnison. Thomas is 44 and Jefferson is 45. They both have 3 children, one in college and two in high school. The kids in college are very ambitious, and they earn their own tuition by working part time during the school year and full time in the summer. Thomas and Jefferson both earn about $35,000 a year. Each own a home, but still owe $50,000 on the mortgage. Each has a truck onwhichtheyowe$10,000. Both of their wives work part time and earn about $1,000 per month. Here's the difference between the two brothers. Thomas has a life insurance policy worth 2 times his salary, or $70,000. Jefferson has a life insurance policy worth 10 times his salary, or $350,000. Since Thomas's life insurance policy costs less than his brother's, he has a little extra money each month. Thomas buys a $5,000 4-wheeler and makes monthly payments. Both brothers pass away unexpectedly. Here's what the situation looks like at Thomas's home. Remember, he had a life insurance policy worth $70,000. His funeral expenses cost $5,000. His wife decides to pay off the car, the house and the 4 wheeler. After all is said and done, she has $0 left of the life insurance money. Since her children are grown, she receives no social security payments. She is in a fairly good situation with her home and car paid for, and she is glad that she had the life insurance policy ' to help her with those expenses. However, she will now have to work full time to cover her monthly expenses. Here's what the situation looks like at Jefferson's house. Remember, he is the brother with the $350,000 life insurance policy. After his wife pays off the funeral expenses, the house and the car ($65,000), she has $285,000 left. She decides to keep working part time, because she enjoys her job. She uses the insurance money to set up an annuity where she is able to withdraw $1800.00 money each month to supplement her income. This will last her until she is 65 and she can draw social security. There were a lot of numbers to pay attention to in that example, but I hope you recognized the main message I'm trying to put across: life insurance is a good idea! Thomas, even with minimal life insurance, was able to provide a fairly secure future for his wife with a place to live and transportation. Jefferson had the foresight to purchase more life insurance, which allows his wife extra security and comfort. Even if you're not the main breadwinner in the family, life insurance still applies to you. For example, if you are a stayat-home mom, think about the many contributions you make to the family. You probably do the housework, keep up the yard, pay the bills, shop and cook, as well as care for the children. Would your husband be able to take on all of these responsibilities if you passed away? 'Some extra money might be helpful so that he could hire out some of these tasks, or he could work fewer hours as he takes on these tasks himself. So how much life insurance do you need? You can probably guess what I'm going to say: the correct amount of insurance is different for everyone, and it depends on your values, goals, and individual family demographics. Do you have a young, growing family—or are you nearing retirement? Do you want your family to scramble just to be able to pay your funeral expenses? Do you want to give them a few years to get on their feet and "retool" themselves for a new career? Do you want to set them up for life without feeling pressured to work or get remarried unless they want to? Do you want their educational goals to come true? The best way to determine the correct amount is to sit down with a financial advisor and discuss your circumstances. Make sure your advisor asks you questions similar to those listed above. If he doesn't, quietly find an advisor who cares enough about you and your family's future to ask the right questions. With your needs and goals in hand, any advisor worth his salt will have worksheets or computer programs to help identify an optimal amount of insurance for your situation. Then, you have to make the decision of how much to buy. The cost of life insurance is surprisingly affordable. Remember, you won't be around to see the money put to good use, but those you love the most will be. "The spider looks for a merchant who doesn't advertise so he can Spin a web across his door and lead a life of undisturbed peace." -Mark Twain Don't let the cobwebs take hold of your door. Advertise in the Gazette • 528-5178 The Scouting News! Scout Leaders Roundtable will be held Thursday, October 13th at 7:30 p.m. at Ephraim Middle School. Youth Protection will be taught that night for anyone who has not had that training. Regular classes will also be taught. All scout leaders are encouraged to attend. The Scouting News is Sponsored by Rasmussen Ace Hardware A C E Paints Sporting Goods Whirpool Appliances 528-7513 The helpful place. PSMS 435 South Main • Gunnison. New! Commercial Quality Cookware • COOKIE SHEETS • PARCHMENT PAPER • EXOPAT SIUCONE PAN LINER • COLANDERS • CUTTING BOARDS • FRY PANS • HEAT RESISTANT SPATULAS 26th • THERMOMETERS • BROWN SUGAR BEAR • MORE!! Gunnison High School 35 East 600 South PUBLIC WELCOME!! KEEP IN TOUCH WITH HOMETOWN X SUBSCFIBE 70 $25 In Sanpete County $30 Out of Sanpete County I Name ' Address I City State I Send to: Gunnison Valley Gazette P.O. Box 143 Gunnison, UT 8 4 6 3 4 I I I I or Call 435-528-5178 • Fax 435-528-5179 gazette@gtelco.net ^ • ^ G I J N N T S O N VAT I FY Gazette 77 3 Great Stuff Foam Sealant for Gaps & Cracks Minimal expanding. Foams an airtight, watertight, waterproof seal. 12 oz. 20 oz 5.97 Anti-Freeze Coolant Guards year round against corrosion for all cooling system metals, including aluminum. Gallon. 6 379 RV Antifreeze Protects from water system freeze down to -50 burst. Also great for swimming pool systems. Gallon. 10'x25 J Plastic Sheeting 4 mil. Clear or black. Do.it. Beautify Your Home f •j^^a J9+13 Do it Best Quality Paints Starting at only Gallon ^^ % I ^i Don't forget to get a 2c Cash Discount at J3IC Silver Eagle! Gunnison Implement Co. Your hardware, Auto Parts & Farm Supplies Store 51 W 200 N-Gunnison 528-7271 Shop online: gunnisonimplement.doitbest.com |
