Todd Carmack


Todd Carmack


Although nobody relishes the idea of thinking about death, the reality is that accidents and illnesses can and do occur – and if the unexpected occurs, it is important to make sure that those you love don’t have to struggle financially. One of the best ways to do that is through life insurance.

This type of coverage can be an integral part of your overall portfolio, regardless of your age, income, or net worth. But while it can be used in a variety of ways – both before and after death – there are 3 common reasons why people buy life insurance.

These include:

  1. Debt payoff
  2. Income replacement
  3. Estate tax planning

Debt Payoff

With the ease of obtaining credit, many people rack up a considerable amount of debt throughout their lifetime. According to Experian’s 2019 Consumer Debt Study, debt has reached an all-time high in the United States, with Americans carrying an average personal debt of nearly $90,500 each! 

This includes mortgage and vehicle loan balances, as well as personal loans and credit cards. When an individual passes away, these debts can become the responsibility of the survivor(s).  

Added to that can be funeral and final expenses and/or uninsured medical expenses. For instance, the average cost of a funeral (in 2020) typically runs between $7,000 and $12,000. So, having life insurance coverage to pay for these expenses can allow your loved ones to move forward without having to drastically change their lifestyle and their lives. 

Income Replacement

Another common reason for purchasing life insurance is income replacement. If your income goes towards paying all – or even some – of your household expenses, the loss of it should be covered by life insurance. 

Many people are under the misconception that income replacement is only necessary for young couples and families. But the truth is that your survivor(s) could also be impacted by the loss of your pension and/or Social Security income in retirement. With that in mind, life insurance coverage can be beneficial throughout your entire lifetime.

Estate Tax Planning

Many people may be impacted by estate taxes. The federal estate tax applies to the transfer of property at an individual’s death. Although assets can typically be passed on to a spouse tax-free, the passing of the second individual can cause a substantial estate tax obligation. 

The estate tax exemption (in 2020) is $11.58 million. But assets above that figure can be taxed at a federal rate of 40% – and this does not include any state estate tax that could also be due. There are life insurance strategies that may be put in place to reduce, or even to eliminate, having to pay this tax obligation out-of-pocket. 

How to Find the Right Life Insurance Protection for Your Needs

There are many different life insurance policies and strategies that could be beneficial, depending on your specific goals. So, before you commit to this coverage, it can be beneficial to discuss your objectives with an insurance specialist.

Contact Information:
Email: [email protected]
Phone: 6232511574

I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.

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