TagLife

How Much Life Insurance Should You Purchase?

Many people think about death and tragedy when they consider life insurance. Life insurance, though, is for the living. Without life insurance, when a family member dies or becomes disabled, the family could be left without the resources needed to keep their home and lifestyle.

In years past, it was suggested that a family have a life insurance plan that was 10 times the amount of their annual household income. With the economy the way it is today with house prices rising and interest rates that are low, the professionals are suggesting families have 20 times their annual household income. My friend’s company, who are plumbers in Smyrna GA just got all of this set up and they were happy that they finally did.

With those numbers in mind, it is easy to see that most American families do not have enough insurance. According to a study by a popular life insurance company, most households have a $320,000 gap between what they have and what they need.

There are many reasons that every family should have life insurance as part of their financial planning:

  1. Income replacement: the ability to earn a living is most people’s most valuable economic asset. When others are dependent on you, you need to consider what can happen to them if your income is gone. You can also implement your retirement income with a life insurance policy. This is especially helpful if your surviving spouse’s benefits will decrease when you die.
  2. It can cover long-term obligations and outstanding debts: when you don’t have life insurance, your family is left shouldering credit card debts, burial costs, and any medical expenses your health insurance company left uncovered using their own funds. It is possible to also use the death benefits of your policy to pay off college tuition, your mortgage, or supplement retirement savings.
  3. Use it for planning your estate: you can earmark the proceeds of your life insurance policy to pay taxes on your estate so that your heirs will not be left liquidating other assets to pay the taxes.
  4. Support a charity: you can designate all or part of the proceeds from your life insurance policy to go to your favorite charity or organization.

Talk with your life insurance agent to discuss options available to you and your family. You don’t want to leave your family struggling financially upon your death.

 

 

Family of One Life Insurance

When you hear talk of life insurance, it is typically about how life insurance can protect the financial future of couples, families, and businesses. So, what does that have to do with you if you don’t fit in any of those categories and are single? Do you also need life insurance?

There are a few people throughout the United States that have no children or anyone else that depends on their income. They may even have enough cash to cover all their final expenses and no ongoing financial obligations. Do you know any of those people? Are you, more importantly, one of those people?

If not, it is important that we illustrate how purchasing life insurance can be a smart move for the finances of someone with no children and is single. The following three questions will help you determine if you need life insurance as a single adult. And this is exactly what my friends at movers near me in Columbia Maryland did not too long ago.

  1. Do you help financially support anyone in your family, such as siblings or aging parents?
  2. If you were to die prematurely, would you have any substantial debts that could be passed on to your surviving family members?
  3. Did someone in your family pay for your education?

If you answered yes to any of the questions above, a life insurance policy is a great way to help you continue meeting those obligations. If someone in your family helped pay for your education, you should consider life insurance to help pay them back for their support. There are several resources online that can help you further determine if life insurance is a good idea for you financially. Regardless of the questions above, there are other reasons life insurance may be a smart move for you.

Though all the reasons above for getting life insurance are valid, the best reason for you to consider purchasing life insurance is likely the peace of mind he can give you knowing that your financial obligations will be covered if something happens to you.