Do You Need a Life Insurance Policy?
Written by Rebekah Morris
When should you purchase life insurance? Or better yet, do you really even need life insurance?
No one likes to talk about death or even start planning for it. A better way to think about life insurance is planning for your family’s future needs. When I say family, I don’t just mean husband and wife and kids. I mean your parents as well.
According to the National Funeral Directors Association [http://www.nfda.org/news/statistics], the average funeral costs between $7,000-$10,000. If something happens to you, does your family have that extra money to pay for the funeral you deserve? No one wants to leave their family vulnerable for inheriting their debit, and we know nothing in life is free.
How much Life Insurance to Buy
So now that we agree you need to buy life insurance, how much insurance should you get? Here are some things to keep in mind when coming up with an amount:
- Immediate Expenses: Funeral costs, uncovered medical expenses, mortgages, car loans, credit card debt, and estate settlement costs.
- Ongoing Expenses: Food, housing, utilities, transportation, health care, clothing, and insurance (health, home, auto, etc.) for your loved ones in the event of your death.
- Future Expenses: Education and retirement costs for your loved ones.
One thing to keep in mind if you are a husband or wife: Your household will be going from a two-salary household to a one-salary household suddenly. Can your bank accounts accommodate that? Will your spouse be able to continue to live in the house that you built a life in and continue the lifestyle they are accustomed to? i.e. If you have children, will they still be able to go to daycare, extra-curricular activities, or such?
After taking these factors into consideration, you should be able to get a rough number of what your loved ones need.
Take some time and really think about your life insurance needs. Your loved ones will be glad you did, and it won’t cost you a thing to get a quote.
Donating a Life Insurance Policy
Life insurance can also provide an inexpensive way for you to leave a lasting legacy in your community with the insurance benefits being gifted to your church or other selected non-profits by designating them as beneficiaries. (Check this post for how.)
Review your Life Policy
Now if you already have life insurance, congratulations! You’ve taken the first step to ensuring your needs are taken care in the event of the unfortunate. Be sure to take time to review the policies as your needs change i.e. wedding, babies, career change, new house, etc. to make sure the insurance is still sufficient. Also, review your beneficiaries from time to time. If the beneficiary is a minor, make sure the life benefits are set up to go into a trust to help reduce any problems. This will also ensure the money is disseminated responsibly.
Contact your local independent insurance agency to get started today.