September 23, 2022
  • September 23, 2022

How much life insurance do I need?

By on August 17, 2022 0
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The amount of life insurance you need depends on your personal situation and your standard of living.

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Life insurance, like most other forms of insurance, is something you won’t have to deal with very often. Once configured correctly, it should be just another bill to pay for security and peace of mind. But the importance of having it – and having the right amount – cannot be underestimated.

As with other types of insurance, the applicable terms, conditions and circumstances vary. The appropriate amount each individual needs depends on their own personal financial circumstances.

If you don’t have life insurance or want more, now is a good time to act. Do not hesitate and get a free estimate today.

How much life insurance do I need?

The amount of life insurance you need depends on your personal situation and your standard of living. There is a series of questions you will need to answer to help you access a specific number:

  • Are you the sole breadwinner? If so, you’ll likely need more coverage than if you were married with two sources of income.
  • What are your long term plans? Are you financially ready, or are you still years away from paying for expenses like your kids’ college education? Your life situation will help determine the amount of life insurance you need.
  • How healthy are you? Life insurance companies will want to determine your medical condition before agreeing to insure you. But you also need to be honest about how you feel and your plans in case of an emergency. Prevention is better than cure and that may mean buying more life insurance than you think you need right now.
  • How much debt do you have? And who will pay if you succeed? If your house is paid off and the kids are grown and out of the house, you may need less insurance than someone in the opposite circumstances.
  • What standard of living are you and your family used to? Sure, insurance can cover the essentials, but if you only insure for that – and you’re used to living (and having bills) at a higher cost – your insurance amount should be set accordingly.

If you don’t have life insurance or are unsure if you have the right amount, act today. You can get the latest vendor information, view local businesses, and compare rates now.

To help you better determine how much life insurance you need, it helps to understand what life insurance really is and why it may be necessary for you and your family.

What is life insurance?

Simply put: life insurance is insurance that covers you, as an individual, in the event of your death. Similar to how auto insurance covers your vehicle in the event of an accident and home insurance covers damage or repairs to your home, life insurance covers you financially after you die. In exchange for payments made directly to an insurance company or through other means (such as an employer), an insurance company will pay your beneficiaries an agreed lump sum upon death.

However, you don’t necessarily have to die to get paid. Depending on the terms and conditions of the insurance plan you have, other cases (such as terminal or critical illness) could also trigger a payout.

There are two main types: term life insurance (a predetermined length of time you will be insured) and whole life insurance (which stays active for life).

Why do I need life insurance?

You need life insurance for the same reason you need all other traditional forms of insurance: to protect you and your family when bad things happen. The financial impact that the death of a loved one can cause would be greatly reduced if the person had life insurance and was covered for an appropriate amount.

In short: there is no set amount of life insurance that everyone should have. It depends on a variety of factors (including how much you’re willing to pay in premiums each month).

Not sure how much life insurance you really need? An online financial advisor can help you determine the right amount to cover you and your family.