If I were to write you a check today for the amount of your current life insurance coverage, would you be able to quit work right now and live comfortably on that money for the rest of your life?
Think of the monthly bills you have–mortgage payment, groceries, utilities, maybe a car payment or student loan. They all add up. If you are like most people, your response to that question would be a resounding NO. That’s why the question is such a good starting point for figuring out how much life insurance you need. If you can’t live comfortably on that dollar amount for the rest of your life, your family won’t be able to either when you die. You need more.
Most financial advisors and other financial experts recommend that you have at least ten times your income as a base amount of life insurance coverage, at a minimum. That amount increases if there are specialized family care needs, super-sized mortgages, large college loan debts, or other special circumstances involved. While that may sound like a lot, you have to remember that it has to cover all the expenses for your loved ones once you are gone.
After you’ve settled on an amount, the question then becomes what type coverage to buy. Most people gravitate to term insurance, which is not nearly as expensive as you might think, especially when you can get a good policy for less than the cost of a daily latte at Starbucks (most people overestimate the cost of term insurance by up to 4 times what it actually is!). Your cost will eventually go up, but it’s great coverage when you need a lot and don’t have much disposable income to spend.
The important point is to have adequate life insurance coverage in place when you die so your family is protected. Talk with a professional Pekin Insurance independent agent today to help you get a better grasp on how much coverage you actually need and how to fit it in your budget. Don’t think you’ll get to it eventually, because your “eventually” could easily turn into your loved ones’ “if only.”