Saving You Money For Life

There are a number of things you should consider when buying life insurance. The first thing to ask yourself is what do you need life insurance for. Do you want it to protect your family in case somethinge happened to you or are you using it for estate planning, etc.? This will help you decide what type: term or permanent life insurance you need.

The second thing to ask yourself is how long do I need the policy for? After the kids are out of college? Forever? If you choose term life insurance you want to make sure the term lasts as long as you need it. 10 years, 20 or 30 years?

Next, you should determine how much is needed. Many experts suggest 5-10xs your income. I’d recommend taking a good look at how much you make and ask yourself, “what is the economonical value of my life?” Meaning in the next 20 years or 30 years how much will you make? You may think $500,000 is a lot now, but if you currently make $50,000 a year, that will only allow your family to maintain the same standard of living for 10 years (and that’s not including any raises or promotions you would have gotten in that 10 years).

People ask me these kinds of questions all the time and I tell them when thinking about life insurance the best kind is the kind that is in force when you die. If you can’t afford the policy or let it lapse or worse, it expires and you die, then the policy did you no good.

You can leave a response, or trackback from your own site.