Unless you’ve filed an extension, the 2014 tax filing season has officially come to a close. This joyous occasion brings upon the timely question of “what should I do with my tax refund?”
According to CNN, nearly eight in 10 tax filers will receive a refund this year of some sort. The most recent data from the Internal Revenue Service (IRS) shows that 84 percent of tax filers making less than $50,000 per year will receive a refund, while roughly one in three making more than $200,000 per year will net a refund.
Instead of using your tax refund to purchase non-necessary items – such as an expensive handbag, a luxurious getaway or pricey sporting gear – use that money to financially protect you and your family.
If you don’t already have life insurance, ask yourself the following question. What would you family do if you were not there to take care of them? No one wants to be faced with that question, but it is important to be protected.
According to a 2013 study by LIMRA, 3 in 10 American households are uninsured. Life insurance offers financial coverage for the unexpected and can be used to cover your monthly bills, fund college expenses, supply a supplementary income or fund final expenses, such as burial costs.
Using the money from your tax refund to fund a life insurance policy is an easy way to start protecting the financial future of your loved ones.
Often times employers will offer group life insurance to their employees. If you are one of these individuals, do you solely reply on your employer for life insurance protection? If so, take the time to review your protection portfolio and enhance it if necessary.
Life insurance coverage should be at least 6-7 times your annual income with 10 times your annual income being the ideal amount.
If you already have an individual life insurance policy, use this time to review your current needs and make adjustments accordingly. Insurance needs may fluctuate depending on a number of factors.
The need for life insurance may increase if one or more of these life events occurred since the last time you updated your policy – got married, bought a house, or had a baby. On the other hand, your need for life insurance may decrease if one or more of these statements are true – children are no longer dependents, recently downsized your home, or funds for college tuition is no longer needed.
If, after careful consideration, you have decided that additional life insurance coverage would be beneficial for your family, take this time to make adjustments accordingly. Money from your tax refund could be used to help pay for the increased premium amount.