How Much is Your Life Worth?
One of the most important questions on people’s minds these days is whether or not they have enough life insurance or investments to support their family in the case of their untimely death. Most people don’t want to buy too much and end up wasting money, but they want to make sure their family can live comfortably as well, which makes buying coverage a tough balancing act. Many people have even turned to hiring consultants in deciding just how much protection is enough. While I can’t provide you with the advice of a professional consultant, I can show you what you need to know about buying a plan.
What You Need to Know About Life Insurance
- There are two major types of coverage available to most people, referred to as Term and Permanent Insurance. Term only covers you for a specific period and is usually the less expensive of the two. Permanent life is good till your death, but is more expensive.
- Although both types are beneficial, some experts recommend term over permanent. Term often costs a fraction of the cost of permanent, but you do run the risk of being uninsurable by the time your term runs up.
- Conventional thinking may tell you that you should always buy protection through your employer, since it is usually less expensive like health policies. However, it’s only recommended that older people get their plan through an employer, as younger individuals may be able to get better rates elsewhere.
- Most industry experts recommend getting enough protection to cover ten times your annual salary. Obviously, if you’re the sole provider for your family then you should probably consider getting more. If you have children that have grown up or are done with college, you probably don’t need as much coverage.
- If you’re spouse is currently a stay at home parent, don’t assume he or she will simply be able to start working should you pass away. They may be able to do so, but it will probably require sending the child to childcare or hiring a nanny, which can be extremely expensive and taken into account when buying.