Correct Life Insurance Coverage

What is the correct life insurance coverage for you? There is no one right answer, because life insurance needs vary from person to person depending on your financial situation and coverage goals. How much life insurance you need depends on the people who depend on your income, the cost of your final expenses, your debts, long-term financial obligations, and more. A general rule is to cover 10 to 12 times of your income, but that simplified approach might not make sense for you.

It's important to take inventory of all the short-term and long-term costs your dependents would have to take over should something happen to you. That can give you an idea of how much coverage you need. By requesting a free life insurance quote from Insurance Best Prices, you can get connected with trusted insurance carriers and talk through your options. You can compare quotes and find the best life insurance policy for your needs.

Why should I invest in life insurance?

If the unexpected happens, how would your loved ones cover your regular expenses? No one wants to think about death, but planning for the unexpected can help your family avoid financial difficulty or ruin. Life insurance can ensure your dependents are taken care of financially. If you pass on, your family would receive a death benefit that can help them pay for end-of-life costs, medical bills, debts, mortgage payments, and more. You can find the best policy for your financial situation by requesting a free quote from Insurance Best Prices.

What costs can life insurance cover?

There are many expenses to consider when determining how much life insurance coverage you need. Consider everything you pay for now and what you might need to pay for in the future like college tuition. Here are a few categories to consider.

Dependent costs

There are many costs associated with raising a child or supporting an aging parent or relative. Consider everyday costs like food, clothing, diapers, and childcare. It’s also important to consider education costs whether that’s private school tuition or college tuition.

Housing, debts, and liabilities

Create a spreadsheet with all your existing expenses, debts, and liabilities. That includes housing costs like rent or mortgage payments and utilities. Your family may also having moving costs if they need to downsize or move to another location. If you have credit card or student loan debt, you may also want to provide support for paying those off.

Other costs and final expenses

In the final days you may incur additional costs like medical bills that your loved ones would need to pay for. Funerals can cost around $10,000, which is no small sum of money to come up with quickly. These are considered final expenses. Consider how much support you are currently providing for your family and other dependents when calculating how much to invest in life insurance.

Life insurance factors to consider

Other factors to consider when shopping for life insurance include:

Health and age

Both your current health and age at the time you sign up for life insurance can directly impact the length of your policy and how much you will pay. The healthier and younger you are, the more likely you are to get a favorable life insurance rate. However, younger people typically require coverage or a longer period of time. Older people have to pay higher premiums for certain types of coverage.

What you can afford

While you may have a lot of expenses you would want to help your family with, you also have to be realistic about how much you can contribute to life insurance. It’s important to have a realistic monthly premium payment that won’t negatively impact your finances. Insurance Best Prices can help you find a plan that works for you financially.