We know we need more. But how much do we need?
- How much can we afford? Is it expensive?
-We have some thru work - but what if I switch jobs?
-Doesn't social security offer something? Anything?
-What about my student loans?
-We just got married (had a baby, bought a home) - we know we need to review, but where do we start?
-We care for our elderly parents. How could we provide for them if something happened to one of us?
Once you have decided to purchase life insurance, the next question to answer is how much to purchase.
Some people select coverage based on an arbitrary amount: $100,000 or $200,000. Others purchase enough to pay off a home mortgage or other major bill. And some stick to the tried-and-true measure of 10 times salary.
But there are other methods to consider. You can complete a fact finder/needs list or use a life insurance calculator. Using a fact finder ̶ something you would complete with one of our life insurance agents (Steven Odrezin, Sherry Marshall or Jackie Ireland Jr. ) ̶ is a fancy way of saying making a list. The list would include things your family would want the life insurance proceeds to cover in the event of an untimely death: car note, college tuition, income replacement, etc. Then prioritize the list based on need and importance. Every family is different and we can help you choose a limit to match your priorities.
If you are computer savvy ̶ and you probably are if you are reading this blog ̶ we would recommend the life calculator on lifehappens.org. Life Happens is a life insurance educational site independent from any life insurance company. You can find out about the different types of life products available, for example, permanent vs. term, universal life vs. guaranteed whole life and other options. The Life Insurance Needs Calculator is on the Calculator tab. By investing just 5 or 10 minutes of your time, you can receive a calculation of the amount of life insurance you need.
Regardless of calculation method, you may be overwhelmed by the size of the need number. Don’t be. Think of it as only a starting point. Show your calculations to us, and we can help fine tune your numbers.
You also want to consider your budget. You never want to be insurance poor, meaning that you purchased so much insurance it caused a major change in your lifestyle. However, would eliminating one fancy coffee or unnecessary trip to the snack vending machine disturb your routine much? There’s nothing wrong with working backwards, first determining the amount that fits within your budget, then determining the coverage type and amount.
And one final thought: any insurance is better than none. Remember that the death benefit is TAX FREE. A little gift would still go a long way for your family. Call or email us today to find out more - 919-755-1401
