For Life Insurance Awareness Month, it’s important to not only celebrate the importance of life insurance, but to also be aware of its intricacies and advantages. In that vein, here are a few helpful tips to help you be more “in-the-know” when it comes to understanding how much coverage you and your family may need.
How Much Debt Do You Have?
It’s not uncommon for a family to become responsible for the cost of paying off debt from loans after a loved one has passed on. If you owe money, consider that amount when determining how much coverage you should have.
How Much Money Do You Spend on Dependents?
When determining how much life insurance you need, make sure to factor in the cost of caring for dependents, such as your children or your parents, as well as their cost of living after you’re gone. Add up your monthly bills and fixed expenses, and then make a list of what you provide for your family. Include necessities like food and medical costs, but also discretionary funding for vacations and other quality of life needs. Depending on who you are supporting and how many, you’ll need to adjust your death benefit amount.
How Much Will Your Funeral Expenses Be?
The cost of your funeral will likely be around $10,000. Your loved ones will need to pay for a funeral home, burial costs, a casket, a headstone or cremation, and more. It’s a good idea to include these expenses into your coverage so your family doesn’t have to worry about them while grieving you.
How Healthy Are You?
Your health and age are big factors in determining how much insurance you should buy and for how long. Hopefully, you will have less debt and fewer dependents in your golden years. However, life insurance rates increase with age because there’s a higher likelihood you’ll get sick or pass away. When deciding to buy life insurance, you need to take that into account. You will probably get a much more affordable rate when you are younger and healthier. If you can afford it when you are young, it’s smart to lock it in.
How Much Will College Education Cost for Your Kids?
The cost of a college education for your children is something to consider when deciding how much life insurance to get. Tuition is one of the largest expenses your kids will likely have. If you want to see them get a higher education and have better opportunities, you should plan for the costs of college in the future, which will probably increase each year that goes by.
Can You Afford Life Insurance?
Studies have shown that often premium costs are much lower than expectation – but you should still determine if you can afford the level of coverage you want. Determine how much you can pay in premiums each month. Keep in mind, higher coverage amounts typically mean higher payments.
When considering life insurance, it’s vital that you assess your finances and educate yourself about the options available. But you also don’t have to do it alone. For help, contact an agent that fits your needs.