Things to Consider Before Purchasing Life Insurance: Building the Right Plan for Your Future

Financial Horizons: Insights for Building Wealth and Securing Your Legacy

By Dr. Jose G. Cardenas, Chief Tax Strategist at The C & R Group, LLC

Purchasing life insurance is one of the most important financial decisions you can make. It’s not just about having a policy — it’s about having the right policy that protects your loved ones, supports your financial goals, and aligns with your long-term strategy. Too often, families purchase coverage without thinking through the key considerations that determine whether their insurance truly works for them.

At The C & R Group, LLC, we guide clients through these critical steps using our Expert Financial Analysis (EFA) to ensure life insurance becomes part of a broader strategy for wealth protection, tax efficiency, and legacy planning.

Here are four essential things to consider before purchasing life insurance.

1. Decide How Long You Need Coverage

The first question is whether you need coverage for a specific period (term life) or for your entire lifetime (whole life, universal life, or indexed universal life).

• Term Life is ideal for temporary needs such as paying off a mortgage, raising children, or covering income replacement during working years.
• Permanent Life provides lifelong coverage, estate planning benefits, and cash value accumulation that can supplement retirement.

Your choice should be guided by both your current financial responsibilities and your long-term goals.

2. Calculate How Much Life Insurance You Need

Many people underestimate how much coverage is necessary. A general rule of thumb is 10–12 times your annual income, but every family’s situation is unique. You must account for:

• Outstanding debts (mortgage, loans, credit cards)
• Future expenses (college tuition, healthcare, retirement for your spouse)
• Final expenses (funeral and estate costs)
• Desired legacy or charitable giving

Our EFA process helps you identify the exact amount needed while also layering in tax strategies (under IRC §7702 and §101) to maximize wealth transfer efficiency.

3. Name a Beneficiary

Choosing the right beneficiary is critical. This ensures your death benefit goes exactly where it’s needed most, without delays or confusion. You can also set up contingent beneficiaries and coordinate designations with your estate plan to avoid conflicts or probate issues.

4. Talk With a Trusted Advisor

Life insurance is not one-size-fits-all. Policies vary widely in terms of costs, riders, investment options, and tax implications. Working with a trusted advisor like The C & R Group, LLC ensures your life insurance policy is not just a product, but part of a comprehensive financial strategy that reduces taxes, builds wealth, and protects your family.

The Bottom Line
Before you purchase life insurance, take the time to consider how long you need coverage, how much is enough, who should be the beneficiary, and which advisor you’ll trust to guide you. Done right, life insurance becomes more than protection — it becomes a tool for financial growth and legacy building.

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About the Author
Dr. Jose G. Cardenas is a retired U.S. Army Finance Officer and the Chief Tax Strategist at The C & R Group, LLC. With a Doctorate in Business Administration and over 20 years of experience in financial strategy, tax planning, and life insurance, Dr. Cardenas helps individuals and business owners protect their wealth and build a legacy. Learn more at www.thecrgroupllc.com.

📌 Disclosure:
This article is for educational and informational purposes only and is not intended to serve as personalized legal or investment advice. Dr. Jose G. Cardenas, DBA, provides tax advisory services through The C & R Group, LLC. Insurance strategies, including Indexed Universal Life (IUL) and annuity products, may be offered through his role as a licensed financial professional affiliated with Experior Financial Group.

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