A reader who knows about Life Insurancey stuff writes…

I read the “chance to do a work of mercy” from yesterday about the family that is now destitute due to the loss of a loved one and his income and I thought that I could probably help prevent that tragedy again.

I think I’ve told you before that I am in the life insurance/financial services/taking care of widows and orphans business so here is a PSA about buying life insurance.

Please, please, please make sure you have sufficient life insurance in place (particularly bread-winners but even spouses without income ought to have life insurance).  Get it from a mutual company (one owned by it’s policy owners not shareholders) so that the company’s long term interests are aligned with yours.

The best 4 companies from which to buy insurance (listed by financial strength and size not by price – it’s worth spending a few extra dollars per month to get a higher quality plan and company):

New York Life: www.newyorklife.com (the company I represent in CT, MA and NY)
Northwestern Mutual: www.northwesternmutual.com
Mass Mutual: www.massmutual.com
Guardian: www.guardianlife.com

The amount of death benefit will depend on what you need to protect but a simple formula is to take your current salary and multiply it by the number of years until your kids will be out of the house.  With a new baby my (personal) calculation looks like this:

I earn $xx,000/year x 22 years = approx. $1,500,000 – $2,000,000 of need

For the spouse that is staying home and not earning an income (although frequently working harder) the number should be at minimum 50% of the first number.

If budget is a challenge I recommend working with a professional who can help you layer products to provide enough protection while keeping the price within your budget.

If any reader is in CT, MA or NY I would be happy to help them out.  They can reach me at dtfinn@ft.newyorklife.com.  For readers in other states I can direct them to another agent or they can request to speak to an agent directly through the company websites listed above.

For most of us our primary financial concern is the well-being of our families. Life insurance can’t take away the emotional devastation from the loss of a loved one.  It can however ease the financial burden so that a family can work through their grief without worrying about keeping the lights on.

Peace and grace,

Daniel Finn
Agent, New York Life Insurance Company

Seems worth looking at.