How much life insurance should you carry? What type do you even need in the first place? Is your current life insurance through work already enough? Do you need more life insurance even if you already bought one a long time ago? Let’s discuss about the Type of Life Insurance Should Be Carrying
These are just some of the many questions that people often have when it comes to life insurance. The thing is while the questions may be the same, the answers may vary from person to person. As an individual, you have your unique dreams and needs, not to mention that your family situation is also different from that of others.
What to Consider Before Getting Life Insurance
Determining how much life insurance you should carry starts with checking who and what you wish to protect, and this is usually dependent on the current life stage you are in.
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- If you are a young parent or newly married, you might need to protect your income before anything else. If anything happens to you, you can leave behind just enough to help your family and spouse substitute the lost income for a specific timeframe.
- If you have a growing family and you have upgraded or bought your house, you might need to add extra coverage for several of your most significant assets. You might also want to protect the future education needs of your children.
- If you are going through a divorce process, you might need to consider several factors, particularly if you have kids.
- If you are already nearing retirement, you might want to think about the needs of your spouse to help them live a comfortable life if they live much longer than you.
How Much Life Insurance Should You Be Carrying?
When planning to buy life insurance, you need to consider the size of your family, the value of your home, your income, your businesses if you have any, and the debt you have right now.
If you already have your own family, you will want to ensure that everything will be looked after properly, from their basic needs such as food, clothing, education, taxes, mortgage, and other essentials in the future.
What kind of needs will your family have if you are no longer there to provide for them? An easy way to determine an estimated amount of the life insurance you should carry is to multiply your present income by 10 to 15.
Is Your Current Life Insurance Coverage Already Enough?
People who already have life insurance through employment often assume that there will already be enough to cover their family’s needs in the future. This may be true depending on the specific life stage you are in right now.
However, there are instances when the amount might no longer be sufficient once you begin to factor in the future and basic costs. Most of the time, people realize that they require more than what their employer has to offer.
What Type of Life Insurance Should You Be Carrying?
What if you have already analyzed your needs only to discover that your budget cannot afford the premium? There are now several life insurance options available right now so you might want to consult the experts to determine what works best for you.
Two popular options you can consider whole life and term insurance. As your income starts to increase, you can assess your current life insurance again, especially if some of your liabilities already changed.