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Are you and your family protected?

Life insurance can be an important part of your overall financial strategy. Here's why.

Life insurance can be an important part of a family's financial strategy.

Thirty-three percent of Americans say they don't have enough life insurance.1 But did you know that in addition to providing financial protection for loved ones after you're gone, life insurance also can play an important role in your long-term savings strategy?

Life insurance offers both living and death benefits, making it a financial product that can be worth considering.

Why do I need life insurance?

If you haven't purchased life insurance, now could be the time. "In your 30s or 40s, you're more likely to be in a situation where people rely on your income," says Steven Weisbart, senior vice president and chief economist for the Insurance Information Institute. Having adequate life insurance can help provide a financial cushion for others if you're no longer there to support them.

And there are other ways life insurance can strengthen your long-term plans.

  • Increase your options. With life insurance, you know your loved ones will be financially cared for after your death. With this protection in place, you may be able to save more for your retirement or other long-term plans.
  • Leave a legacy. Using death benefits to create an inheritance, fund a scholarship or support a charity ensures there will be money allocated to the people or causes you care about.
  • Supplement your savings. Although life insurance shouldn't be your sole instrument for saving, it still can play an important role in your long-term plans. Many types of permanent life insurance policies, such as whole life, accumulate a tax-deferred cash value. You may be able to borrow against this value during a financial emergency or withdraw the funds in retirement. "At any point, you can stop paying premiums, take the amount in the account and have it paid to you as lifetime income," Weisbart says.

How much do I need?

Consider your circumstances. Decide what the benefits might be used for (paying off a mortgage, covering your children's education or helping replace lost household income), and figure out how long you'd want the benefits to last. "Look at the sources of money you have existing now and the amount of money your loved ones may need. Then purchase a policy that makes up the difference," Weisbart says.

» Use our life insurance calculator to help determine your coverage needs

When should I reevaluate coverage?

Sit down with your financial professional every year to review your coverage. Or adjust your policy after major life events that affect those the policy protects, Weisbart says. Qualifying events might be a marriage or divorce, the birth of a child or grandchild, or changes in your or your significant other's health.

» Learn more about the importance of life insurance.

Get guidance.

Talk with a financial professional Need help figuring out the protection your family may need? Talk with a financial professional for assistance.

1 Source: 2013 Insurance Barometer Study, Life Foundation and LIMRA

Steven Weisbart and the Insurance Information Institute are not an affiliate of any company of the Principal Financial Group.

Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation, 1-800-547-7754, Member SIPC and/or independent broker dealers. Securities sold by a Princor® Registered Representative are offered through Princor. Princor and Principal Life are members of the Principal Financial Group® (The Principal®), Des Moines, IA 50392. Certain investment options may not be available in all states or U.S. commonwealths.

© 2013 Principal Financial Services, Inc.

t13070303u4 – 7/2013

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Securities offered through Princor Financial Services Corporation, member SIPC