I have been approached with a lot of questions on life insurance. The most common question is how to figure out how much life insurance is needed. There are a lot of factors for people to consider when determining how much life insurance is needed.
Family life insuranceThis is a very simple list to consider, there are definitely more factors to consider as well. For example, final expenses should be considered. Those can range from about $3,000 (basic cremation) to over $20,000 (elaborate funeral).
The overall goal of life insurance is to make sure that your family is taken care of in the event that you are no longer there. If you are in a single income home (for example, the husband works and the wife stays at home to take care of the kids), then the husband’s life insurance policy is very important. How will the family make it without the “bread winner?” Will the single parent have to find a job? However, the wife in this situation needs one as well. New expenses will be there, like child care, and money to allow the husband to take some time off of work to be there for the children, among other expenses.
Mother with kidsI typically recommend TERM life insurance. This means that it will cover you for 10, 15, 20 or 30 year terms. There are situations that a whole life or universal life policy may be a great fit for you and your family.Sometimes, it will be a combination of both. You can have a $25,000 whole life policy, with a $250,000 term policy that would be there for 20 years.
The best way to figure out how much life insurance you need would be to meet with me to discuss it. I would be honored to help with this very important need. Being an independent broker, I can shop around numerous life insurance companies to find the best fit for you.
You may have life insurance through work, which is great! The biggest question I would have for you is if you have enough life insurance to cover your family’s needs? The group life insurance plans that would be offered at your job are a fantastic deal, but if you are no longer employed there, those benefits will no longer exist. They should be considered as a part of your life insurance plan!