It’s an unfortunate fact that life expectancy in the US has dropped recently. This has led many people to examine whether or not they should have a life insurance policy and, if so, how much coverage they should have. Here are some basics about life insurance, intended to help you decide whether it’s the right protection for you and your loved ones.
Do I Need Life Insurance?
Life insurance pays out when you die, providing funds for whomever you name as a beneficiary in the policy. Usually, beneficiaries are spouses or partners and children, although they can be anyone who depends on your income financially to survive, like grandchildren or a sibling with a disability.
Would your family’s home be at risk without you there to provide for them? Would your children be able to attend college? If they would be unable to pay for the things they have now or have planned for the future, life insurance is a must. It will give everyone involved peace of mind knowing they will be okay financially even if the worst happens.
How Much Life Insurance Should I Get?
The general rule of thumb is you should provide at least 6-10 times your income with a life insurance policy. However, you may wish to have more than that if you have a large number of dependents, an expensive mortgage, or other expenses that would be hard for your family to meet after your passing.
A substantial life insurance policy can be very difficult and costly to obtain the older you get because the risk of you needing the policy increases with age. Therefore, starting your policy while you’re still young and healthy is best, giving you time to let it grow without it being a financial burden and to minimize the chance that you’ll be turned down for coverage due to poor health or advanced age.
What Are the Different Kinds of Life Insurance?
There are three basic kinds of life insurance:
- Term life insurance - coverage for a specific period of time
- Whole life insurance - coverage for your entire lifetime
- Universal life insurance - a mix of term and whole life with more flexible premiums
It can be challenging to decide what kind of insurance to purchase and exactly how much to get. That’s why it’s important to work with an experienced insurance agent and not simply buy any old policy online.
Need help finding the personal insurance coverage that’s right for you? Call Wayne Hilzinger Agency at 314-815-3400 to get the personalized help you want.