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Having life insurance is a way to protect the people who matter to you when you’re no longer with them. While thinking about a future for them that doesn’t include you isn’t easy, making sure that your family has the resources to protect their finances and help them achieve their goals can help you—and them—have peace of mind. With the right plan in place, you can feel more confident your family will be prepared to meet their financial needs and weather uncertainty.
Liam, a Financial Wellness coach, recently worked with a new father considering life insurance needs for his growing family. In addition to purchasing his first home, he had just celebrated the birth of his newest family member.
The answer to this question will be different for everyone and depends on your circumstances.
Want some help walking through your options? Your Financial Wellness coach can work with you one-on-one to provide clarity and help you make the decision that’s right for you.
There are two main types: Term and Permanent. Term life insurance is a set premium for a time period of 10, 20 or 30 years. Permanent life insurance stays with you your whole life and builds a cash value.
Depending on the type of permanent life insurance you purchase, you may get a cash payout in varying ways. Factors that affect the payout include:
The cost of your policy will depend on the type and amount of coverage you purchase and your insurance needs. You may be single, with no mortgage. If so, your insurance needs may be low. You may be nearing retirement with grown children and no mortgage, but still want some protection. Your needs may be in the middle. Or you may have young children, a new home and spouse who greatly depends on your income. Your protection needs are high.
If your company offers Goldman Sachs Ayco as a benefit, you can work one-on-one with your coach to calculate the right protection to fit your personal situation. Discussions with your coach are completely confidential and can help you to fully understand options and the potential impact to your cash flow.
Some types of permanent life insurance may build up a cash value that can be borrowed against, or even withdrawn from, potentially tax free. The premiums that you pay on your policy are divvied up to cover the death benefit, as well as the fees and expenses of the policy. A portion of your premium may be set aside in a cash value account that earns interest or can be invested in the market.
A Financial Wellness coach can help you understand your policy and determine whether it fits your needs now. If it turns out that it doesn’t, you could have several options we can walk you through.
It is always a good idea to list a beneficiary so your intentions are clear. The primary beneficiary is the person who will inherit the proceeds of the insurance policy. You may also choose a contingent, or secondary, beneficiary who would inherit if the primary beneficiary is not able to do so.
Often employers do provide life insurance. You can check with your company’s benefits officer to understand the employer-provided life insurance you may currently have. However, you should look at employer-provided life insurance as one piece of the total life insurance picture.
If your company offers Goldman Sachs Ayco as a benefit, you have the option of using the Goldman Sachs Ayco Protect tool to calculate how much life insurance you may need and potential insurance products for you.
Your Financial Wellness coach is an additional and completely confidential resource to help you understand your exact needs and how to best maximize your financial resources.
Updated for tax year 2022