How Much Life Insurance Do You Need?
Unpredictable investment is not a good decision after your retirement. Most of the people invest their money with the intention to get benefits after the completion of their job tenure. Life insurance is a personal matter. No one can force people to go for it. Yet there are basic things one must know about life insurance.
A simple strategy:
The main purpose of life insurance is to protect your family financially when you die. Most of the insurance companies have made their online calculators to motivate buyers for life insurance. But Maurer is saying otherwise. He opines that “life insurance seekers need to figure out what coverage they should go with”. He suggests that make a calculation by yourself and decide whether you need extra coverage or not.
Here go the things to reckon with:
Final expenses
The expenses of burial and funeral have costs of $10,000 to $20,000. There are chances that your beneficiaries might get tax-free proceeds to receive the money. You should use $15,000 as a ballpark number.
Mortgages and other debts
No doubt, your car loan, mortgage balance and other debts will be really hard for your survivors to pay the dues. Hence, life insurance is the best option to protect them from such problems.
Education expenses
Fees of colleges are speedily changing. However, it is really difficult for you to decide the education expenses. Maurer suggests that most of the colleges increase 5% fees in a year and calculate your coverage as per this trend.
The time factor
Time factor is really important for you to decide for how many years you wish to cover your life insurance. If you are physically fit then you can go with the insurance plan of 20 years. It goes without saying that some term policies can be converted into permanent policies. No doubt, premiums will be high in the teething months but they will drop with every passing year.
Life insurance is a kind of financial security. It is more important than risky investment. If you wish to protect your family financially, life insurance is the best option to utilize.
