Why Do I Need Life Insurance?

When it comes to financial planning, there are many exciting and meaningful topics we discuss with our clients. Things like retirement, buying a vacation home, planning for children, etc., are all important issues. Part of the magic in what we do is helping clients see what’s possible with their money and how best to leverage their wealth to create the lifestyle they’ve been dreaming of. Naturally, some conversations might feel a little less exciting, or even scary. Things like planning for death, illness or divorce might be unpleasant and potentially stressful, but are crucial nonetheless. Our world revolves around a lot of “what ifs” because, if we don’t address them, they could pose an even scarier situation for you or your loved ones.

I often talk about the unique risks that the LGBTQ+ community faces, especially when we think about building a family or protecting our rights as a parent. With marriage equality legislation passing in 2015, many folks are doing just that and having children. Protecting your family from death or sickness is not unique to the LGBTQ+ community, but is important to talk about. According to a study completed in 2022, 68% of survey respondents from this community believed they need life insurance, yet only 38% had coverage.  

The need for life insurance can ebb and flow throughout your life. I often come across clients who have old life insurance policies that were necessary years ago, but perhaps not anymore. Let’s look at four common reasons why one would want to consider life insurance:

1. Income replacement

Whether you’re a family with two working incomes or a family with one breadwinner, life insurance is critical in the event that a working partner dies prematurely. In addition to the heartbreak of such a tragic loss, imagine the impact of losing an income stream and how that might change the financial landscape for your family. Life insurance is designed to provide a level of security to ensure the bills can continue to be paid and financial life can resume as normal, especially during an emotional time with losing a loved one.

2. Pay off debt

Unfortunately, most debt doesn’t go away upon death. If you hold considerable debt, such as a mortgage, you might want to look at life insurance to help cover that debt in the event of a premature death, so that your loved ones are not held financially responsible.

3. College planning

Like myself, there are many people who want to be able to support their children’s college expenses. Saving into a 529 plan is a great way to do so, but again, what if you pass away prematurely? Life insurance, specifically a term policy, that provides insurance for a stated period of time, could be a way to ensure there is money available to pay for college expenses when the child turns 18.

4. Leave an inheritance

Life insurance is a tax-friendly way to leave money to loved ones as an inheritance. Upon passing, proceeds from the life insurance policy are paid to the beneficiary, and generally this benefit is not taxable in the hands of the heirs.

The need for life insurance changes over time as circumstances in your life evolve. For example, the amount of insurance you should purchase to help cover your debt can gradually be reduced as the debt is paid down over time. In consultation with your Corient Wealth Advisor, you should periodically assess your life insurance portfolio (both permanent and term insurance) to help ensure that you hold adequate coverage. This type of assessment also helps you avoid paying for insurance that you no longer need.


Source: https://www.loma.org/en/news/industry-trends/2022/pride-month-is-an-opportunity-to-look-at-lgbtq-americans-financial-security/


Lisa Neira, CFP

Lisa Neira, CFP

Wealth Advisor

Lisa is a Wealth Advisor in our Morristown, NJ, office. Lisa joined legacy firm RegentAtlantic in 2021, bringing over 15 years of experience in wealth management and providing financial advice to high-net-worth individuals and families. She advises clients on financial planning, tax planning and investment management to help them achieve their financial goals leading up to and through retirement. Lisa specializes in working with LQBTQIA+ clients and their families, and understands the unique financial challenges this community generally faces. She also serves as a LGBTQIA+ planning resource to other advisors across the firm. She is a featured speaker and has been quoted in financial news media, including Asset TV, Barron’s Advisor and InvestmentNews. Lisa holds the CERTIFIED FINANCIAL PLANNER™ certification. She graduated from Richard Stockton School of New Jersey, earning a Bachelor of Science in Business Studies with a concentration in finance and economics. Prior to joining RegentAtlantic, Lisa was a VP, Wealth Planner at Fidelity Investments. Lisa resides in Cedar Grove, New Jersey, with her wife, Mindy Neira and their daughter Jackson. She enjoys traveling, cooking for her family, running around with her puppy, Avery, and watching her favorite sports teams. She is an avid fan of the Nets, Jets and Yankees.

Barbara Bilello

Barbara Bilello

Partner, Wealth Advisor

Barbara is a Partner, Wealth Advisor in our Morristown, NJ, office. Since 1996, she has provided tailored services and customized advice that help high net worth clients and their families to build and protect their wealth across generations. Barbara joined legacy firm RegentAtlantic in 2017, was named Co-Chair of the firm’s Wall Street Women Forum in 2021, was named as Partner in 2021 and launched the firm’s LGBTQ+ practice. Her previous experience includes positions with U.S. Trust and Goldman Sachs & Co. Barbara holds a bachelor’s degree from Providence College in Rhode Island. A sought-after speaker on wealth management and an active volunteer, Barbara has helped to provide early learning experiences for young children, raise funds for the Pancreatic Cancer Action Network (PanCAN), mentor women and ensure the LGBTQ+ community gets the representation, advice and strategies it needs to succeed. She and her family split their time between Williamsburg, Brooklyn, and Asbury Park, NJ.


This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, tax, insurance, or investment advice.  This does not constitute an offer to provide any services, nor a solicitation to purchase securities. The contents are not intended to be advice tailored to any particular person or situation. We believe the information provided is accurate and reliable, but do not warrant it as to completeness or accuracy.  This information may include opinions or forecasts, including investment strategies and economic and market conditions; however, there is no guarantee that such opinions or forecasts will prove to be correct, and they also may change without notice.  We encourage you to speak with a qualified professional regarding your scenario and the then-current applicable laws and rules.

Advisory services are offered through Corient Private Wealth LLC and its affiliates, each being a registered investment adviser (“RIA”) regulated by the U.S. Securities and Exchange Commission (“SEC”).  The advisory services are only offered in jurisdictions where the RIA is appropriately registered.  The use of the term “registered” does not imply any particular level of skill or training and does not imply any approval by the SEC. For a complete discussion of the scope of advisory services offered, fees, and other disclosures, please review the RIA’s Disclosure Brochure (Form ADV Part 2A) and Form CRS, available upon request from the RIA and online at https://adviserinfo.sec.gov/. We also encourage you to review the RIA’s Privacy Policy and Code of Ethics, which are available upon request.

Our clients must, in writing, advise us of personal, financial, or investment objective changes and any restrictions desired on our services so that we may re-evaluate any previous recommendations and adjust our advisory services as needed. For current clients, please advise us immediately if you are not receiving monthly account statements from your custodian. We encourage you to compare your custodial statements to any information we provide to you.