Life Insurance Needs Assessment | HSBC

 

Assess your needs

Insurance, an important part of lifecycle planning

Your insurance needs change based on where you are in life. Preparing to purchase life insurance is an opportunity to take stock of your current situation and future plans. Who relies on you now and how secure will their futures be? Are you planning on starting a family soon? Take into account your goals when determining which type of insurance is for you.

Wealth protection

When you are just starting out – getting married, planning for a family – you are in what we call the "wealth protection" stage of life. While these may also be wealth accumulation years, insurance can be an integral part of protecting what you're building.

Protecting your family

Your family requires coverage that can expand with your financial demands. You may want to build wealth for your children. Also, consider costs such as mortgage payments and savings for college to determine what your spouse or children's guardian would need in order to cover expenses without you. Should anything happen to you, life insurance can help ensure they're able to continue the life you want for them. An optional Child Rider can provide even more financial protection by insuring dependent children.

It's important to consider the beneficiary of the policy. Many choose their spouse, but naming any adult beneficiary for whom you have a financial obligation or duty of care is acceptable. Generally, it is not advisable to name minor children as beneficiaries, but arrangements can be made through trusts or by appointing a guardian to manage assets on their behalf. That way, they'll still benefit should something happen to you or your spouse. Either term or permanent life may be appropriate based on your financial goals.

If you're single and responsible for other family members, such as aging parents or siblings, your financial plans should provide for their needs as well. Life insurance can help provide the coverage you need, so those who rely on you will be taken care of. If you have debts guaranteed by someone else, obtain coverage so your guarantor will have help to repay the debt. Either term or permanent life insurance may be appropriate.

Protecting your lifestyle

You and your spouse have committed to sharing everything, including the financial obligations necessary to secure your desired lifestyle. Life insurance is key to that commitment, helping ensure that your spouse is taken care of and the wealth you've built together is protected.

Wealth transfer

Looking beyond your own financial needs, legacy goals can be an important consideration. You may want to transfer assets to children, a family member, or your favorite charity. Planning for these legacy goals is fundamentally different from arranging assets you need during your lifetime.

Questions to ask Lifetime goals Legacy goals
When will the goal be met? During your lifetime After your lifetime
Who receives assets or income? You and your spouse, charities A surviving spouse, family
Who makes decisions? You and your spouse A surviving spouse, executors, heirs or trustee
Taxes/costs? Income tax Income, estate and inheritance tax, probate

Meeting legacy goals

Legacy goals can involve more complexity than lifetime goals. While you are alive, you and your spouse have control over decisions about your assets and retirement income sources. Income tax planning is an important consideration.

When your estate is transferred, you want to make sure your assets will pass on according to your wishes. In order to maximize legacy assets, you must also consider estate and inheritance taxes and probate costs – all of which can greatly erode assets available for a surviving spouse, heirs, and charity.

Once you have identified specific goals for leaving assets to others, planning can help to make sure your wishes are fulfilled privately and without unnecessary taxes, costs, delays, or disputes. Life insurance is often a useful strategy for several reasons.

Life insurance proceeds are:

  • Typically income tax-free
  • Private and avoid probate
  • Paid out quickly and quietly to beneficiaries
  • Difficult to dispute, unlike wills
  • Provide funds for your heirs to carry out your wishes

Investment and certain insurance products, including annuities, are offered by HSBC Securities (USA) Inc. (HSI), member NYSE/FINRA/SIPC. In California, HSI conducts insurance business as HSBC Securities Insurance Services. License #: OE67746. HSI is an affiliate of HSBC Bank USA, N.A. Third party whole life, universal life and term life insurance products are offered through Insurance Agents of HSBC Insurance Agency (USA) Inc., which is a wholly-owned subsidiary of HSBC Bank USA, N.A. Products and services may vary by state and are not available in all states. California license #: OD36843.


Investment, Annuity and Insurance Products:
ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES ARE NOT FDIC INSURED ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES MAY LOSE VALUE

All decisions regarding the tax implications of your investment(s) should be made in connection with your independent tax advisor.

†† Investments, Annuity and Insurance Products:
ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES ARE NOT FDIC INSURED ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES MAY LOSE VALUE
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