If everything goes according to plan, you’ll be able to pay off your home, send your children to college, and retire comfortably. But you know anything may happen, so do you want to help plan for your family’s future if you can’t be there? Life insurance may be able to assist them in lessening their financial load.D King can show you a number of coverage options you can tailor to your priorities and budget. In fact, life insurance plans may be more affordable than you might think.
Not necessarily. If you have no children or dependents whom you support financially, you might not need a life insurance policy after all. Life insurance aims to provide a solution for those who seek income replacement, mortgage protection, estate planning, leaving a legacy, or burial expenses. However, if someone you love is dependent on you financially, you need life insurance.
To determine how much life insurance you need, it’s best to look at your surviving family’s immediate, ongoing, and future financial obligations, and compare that with your financial resources. Below are examples of each type of need:
- Immediate: funeral costs, medical bills, taxes.
- Ongoing: mortgage payments, utilities, food.
- Future: college tuition, retirement funds.
Financial resources can include your partner’s income, savings, income-producing assets, and investments. Considering all these obligations and resources, the difference between the two is how much life insurance you need.
Buying a term life or a combination of term and permanent insurance may help you pay a lower premium. Buying a policy early in life is also a good way to ensure a lower premium.
The older you are, the higher the premiums, and the more risk you have of developing a health condition that could increase your premium even more or disqualify you from getting coverage at all. You can read more about saving on life insurance here.
This depends on who you ask and what they are attempting to sell you. A child’s policy can provide a saving vehicle, the ability to buy more coverage in the future without proving insurability and also pay the death benefit in the event of a child’s death, which can be used for burial expenses.
However, most child coverages aren’t large enough to begin with (maximum benefit is typical $25,000), and they aren’t supporting a family financially, so none depends on them. Besides, cases for a child’s death are very slim, statistically, and although it may be the most tragic experience, life insurance won’t really help.