Do You Need Life Insurance if You Have a 401k?
The answer is always yes.
Having a 401k is a smart step toward building a secure retirement. But even if your account looks strong, life insurance still plays an important role in protecting your family. A 401k is built to support you during retirement, while life insurance is designed to support your loved ones when you’re no longer here.
At Trusted Insurance Partners LLC in Plano, TX, we believe a complete financial plan includes both.
The 401k: A Retirement Tool, Not a Safety Net
Your 401k is a long-term savings plan. It grows over time and is meant to provide income during retirement. But it has limits:
- Withdrawals your family takes may be taxed.
- It can take decades before the account grows significantly.
- It won’t cover immediate needs like funeral costs, medical bills, or the mortgage.
That’s where the gap appears. Your family may not have fast access to those funds during a difficult time.
Life Insurance: The Immediate Lifeline
Life insurance fills that gap by providing a tax-free payout to your beneficiaries right when they need it most. That payout can:
- Replace income to keep your household stable.
- Pay off debts such as a mortgage or car loan.
- Cover final expenses without added stress.
- Support future goals like college or retirement.
It’s less about money and more about making sure your family is taken care of.
Why You Need Both
Your 401k takes care of your retirement. Life insurance takes care of your family if the unexpected happens. Together, they provide peace of mind and a stronger financial plan.
And while many families in neighborhoods like Willow Bend, Prairie Creek, and Kings Gate may feel financially secure, the numbers tell a different story. Studies show that nearly 1 in 4 higher-income households still face a life insurance coverage gap of nearly $400,000, and almost 20% of those families have no life insurance at all. Nationwide, about 42% of adults say they don’t have enough coverage, and 34% of households with children admit they have no policy in place.
These aren’t just statistics, they’re reminders that even in strong communities, coverage can fall short. The best time to get life insurance is now, give our office a call at 469-656-8477 to discuss your life insurance options!
A Neighborly Reminder
At Trusted Insurance Partners LLC, we’re thankful to serve families across Plano. From Legacy, to North Dallas, and everywhere in between. Whether you’re thinking about life insurance, renter’s insurance, auto insurance, or exploring the best home insurance options for your family, our team is here to help.
We don’t just match policies to people. We listen, we guide, and we walk with you through the process. If you’d like a no-obligation consultation, reach out anytime. We’d be honored to help you protect what matters most.