How Much Life Insurance Do I Need?
One-size-fits-all is not the best way to purchase life insurance. You need to consider why you are wanting life insurance. Are you interested because you would like to be certain your family is financially set if you should die unexpectantly? Are you purchasing life insurance to protect you and your family, but to also earn cash value? Are you purchasing life insurance to protect you and your family but also act as an investment? Do you want insurance to pay off your mortgage should you die? Do you have outstanding loans you would like to pay off? Do you have medical bills you would like to cover? Do you also want to cover funeral costs? Do you need enough money to ensure your children can go to college without being encumbered by debt? How much money will your family need per year to replace the income you bring in?
In order to determine how much insurance you will need, you need to take all of these questions into consideration. For example, if your family will need $100,000.00 a year to continue the lifestyle you have provided for them, and when you consider the age of your children your family would need this for at least 10 years, then to just cover this part of your insurance needs, you will want a $1,000,000.00 policy. If your mortgage is $500,000.00, and college for two children is $250,000.00, and you have debt, funeral, and potential medical bills to cover, perhaps this figures out to be another $250,000.00, so now you would want a policy valued at $2,000,000.00. If you were concerned about inflation, you might want to bump that number up by $500,000.00 or so.
Doing your due diligence in determining what you need, then selecting the type of insurance you want to purchase (term, whole life, or universal life, you will be prepared to look at the cost.
What is the cost of Life Insurance?
Instead of guessing what the cost of insurance is, check it out and get several quotes from reputable agents and companies. Life insurance can range from quite inexpensive to several hundreds of s a month. Numerous factors come into play. Your age, your medical condition, the amount of the death benefit, the type of policy you select and any other options presented by a qualified agent.
In Closing
Insurance is something we all need to think about. It is a choice for sure, but not a choice we should put off making. It is something we hope will do what we intended for it when we purchase a policy. To be certain of this, planning and intentionally considering the options up front, is essential.