Did you know that September is Life Insurance Awareness Month? This is a good time to examine your current life insurance policies and assess your needs to see if you need to increase your amounts or obtain a new policy based on your findings. Moreover, if you currently don’t have a life insurance policy, this might just be the best month to get one.
While you may think that it’s as simple as signing a few forms, there are several things to consider in order to ensure that you have all of the life insurance coverage that you need. By examining your debts, income, and dependents, you’ll be able to make the best decision regarding your family’s future.
Wondering if you have the right amount of life insurance coverage? Here’s what you need to know.
Debts
The first thing to consider is the type and amount of debt that you have. Do you still have a mortgage on your home? If so, how much? What about your vehicles, kid’s schooling, and other things that you pay for monthly? Your life insurance needs to be a replacement for your income, should the worst happen, so you need to make sure that you have enough life insurance funds for your family to pay the bills for several years.
Income
When it comes to income, there are several distinct factors to consider. They are:
Your Age – How far from retirement are you? Someone who is in their late 50s will have fewer working years left than someone in their 20s, so they would need less life insurance. Obviously, someone who is younger and with many years of work ahead of them needs a higher amount of life insurance.
Your Salary – How much do you make each year? Take your number of potential working years and multiply that by your salary. This will give you a ballpark amount that will allow your loved ones to pay the bills should something happen to you. Consider this your “starter” amount for your life insurance policy.
Dependents
Providing for your children, making sure that they have food, clothes, housing, and the costs of school covered, is another thing to consider when choosing your life insurance amounts. Make sure to calculate the cost of college, including inflation, because your children may choose to attend and could use some of your life insurance proceeds in order to pay tuition and other costs.
Inflation and Other Costs
Speaking of inflation, you need to keep it in mind when considering life insurance amounts. What will your mortgage cost in the future? What about maintaining the standard of living for your family after you’re gone? In addition, you need to think about funeral costs. The last thing that you want is for your family to worry about paying for your funeral or celebration of life while they’re grieving, so it’s best to consider these costs when choosing the amount of life insurance you want to carry.
Contact Spivey Insurance
Do you have questions about life insurance? Are you wondering about how much life insurance you should have, or are you considering raising the amount on your policy? If so, please reach out to Spivey Insurance. Our knowledgeable agents can help ensure that your loved ones are protected should something unexpected happen.