Do You Have Enough Life Insurance?

No one likes to think about death, but it’s pretty much a guarantee. Whether you like it or not, you are going to die. That means you need to be properly insured so that your survivors can be financially secure after you kick the bucket. Although people know they aren’t going to live forever, many are still resistant to buying life insurance. Some haven’t even purchased life insurance at all. Despite your best efforts, neglecting to buy life insurance will not make the Grim Reaper go away. He will find you eventually, and he won’t ask how much insurance you have before he takes you.

A recent Bankrate study found that 37% of Americans with children who are under 18 years old do not have life insurance. However, among those who do have life insurance, the picture doesn’t look any better. Roughly one-third of parents who have life insurance have no more than $100,000 worth of protection. This is barely enough to protect a family.

Income not a factor

Income does not seem to be a major factor when it comes to coverage. Surprisingly, even survey respondents who reported making an annual salary of more than $75,000 said they had less than $100,000 worth of life insurance. Doug Whiteman, Bankrate’s insurance analyst, estimates that more than 20 million households with young children either don’t have life insurance or don’t have enough.

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How much life insurance do you need?

The amount of life insurance you’ll need to purchase depends on your particular life situation. However, there are some basic guidelines you can follow.

“There are many rules of thumb regarding how much life insurance is enough,” Whiteman said. “Ultimately, it’s a personal decision that’s based on a range of factors including your debts, mortgage, potential college costs for your children (that’s if you have any), and likely burial expenses. Bankrate has a great life insurance calculator to help you come up with the right amount.”

Bankrate says how much life insurance you purchase can also depend on factors such as your age, the ages of your spouse and children, and your income. Know that your premium rate will rise as you age. Term life insurance, which covers a specific number of years, may be the best way to manage risk and keep future options for life insurance available. It’s important to consider the ages of your spouse and children because this will assist you with deciding how many years of income replacement will be necessary when you pass away.

Choosing a policy

Your life circumstances should be kept in mind when deciding on a whole-life, term, or combination policy.

“One tactic I recommend is to separate the planning for your spouse from the planning for your children, because the timeline for needing coverage may differ. If you have a 15-year-old child, then you really only need a 10-year term policy to see the child through college. But if you’re 45 and plan to work for another 20 years, your non-working spouse is going to need a 20-year life insurance policy, at least,” insurance literacy advocate Tony Steuer told Bankrate.

http://www.InsurancePricedRight.com

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About robertjrussellcompanies

International Real Estate Agent * Insurance Broker * Radio Talk Show Host * Public Speaker * find out about me - visit http://www.robertjrussellcompanies.com
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