How much life insurance do you currently have? Only around 60% of Americans have life insurance, and the majority of them only have a workplace policy given to them through their company. These policies are usually only worth a couple thousand dollars, maybe $10,000 at the most. While that can give you peace of mind about your burial costs, that’s probably about it. The average funeral in the United States costs around $7,000 to $10,000, so there goes your life insurance policy. There won’t be money left over to cover your final bills, pay the mortgage, or leave a gift behind for your children. If you are the primary income earner, this can leave your family in an incredibly tough position while they are already grieving over their loss.
Life insurance can give them the income they need without additional stress during a difficult time. If you want to get enough life insurance to provide for your family after you pass away, how much will you really need? Our life insurance team in Munster can help you figure it all out and find the right policy for your needs. You’ll just need to know some basic information about your finances before we get started.
How to Determine How Much Life Insurance You Need
Calculate your debts.
Your life insurance policy should give your family enough to settle your final debts. Those don’t go away after you die, and you don’t want to leave your family struggling to pay the bills in the middle of their grief. Figure out how much they would need to cover things like your car, credit card debt, student loans, and potentially even your remaining mortgage amount. This will allow them to clear the slate and not worry about how to make your credit card payment.
Ideally, you should leave your family enough money so that once it is invested, it provide enough income to replace what you were contributing to the family until the age you planned on retiring. This can be tricky to determine, especially if you aren’t an experienced investor, but an insurance agent can help you determine how much your family will need in order to replace your income.
Decide if you want to leave a gift behind.
Some people choose to take out a slightly larger policy than they actually need with the intention of leaving behind a monetary inheritance to their children or grandchildren. If you’d like to do this, determine how much you’d like to leave to them and add it to your life insurance total. This will allow your family to cover the costs above and still have enough for a gift.
The Next Steps
Don’t worry if you don’t have an exact figure in your head before you start to shop for a life insurance policy. Working with an agent at the Gutierrez Family Agency can help you take your answers to the above questions and find a policy in the size to meet your needs and your budget. There are two main types of life insurance policies to choose from: term life and permanent life. Term life covers you for a particular period of your life; for instance until you retire. Permanent life insurance covers you no matter how long you live and can often be borrowed against if you need a loan. Which policy you choose will depend on your circumstances and what you want the insurance policy to cover. If you are using it as an income replacement, term life is the way to go. If you are using it primarily as a means of inheritance for your family, permanent life may be more suitable.
Are you ready to make sure that your family is covered in the event of your death? We can help. We know that facing this reality isn’t fun, but we also know the peace of mind that it can bring to both you and your loved ones. You want them to be taken care of even if you aren’t around, and we can make sure that it happens. Give us a call or contact us through our website to set up an appointment to speak with one of our life insurance agents. We’ll get to work finding a policy that’s perfect for you.