You don’t need life insurance if you don’t have family or other loved ones who rely on you for support. If you have a family that you would like to support in the event of sudden death, how much life insurance do you need?
A simple formula that takes into account the ages of your children, the cost of raising your children, your spouse’s income and your mortgage payment will help you determine a realistic number. In the best of all possible worlds, his family will be entirely in control forever, but since he is investigating the possibility of his death, the best scenario in the world does not exist. Think about what is realistic in terms of what you can afford right now. Your death should not be like winning the lottery for your loved one, or a quick trip into poverty. It’s a job that balances meeting your current needs with taking care of the job after you die.
If your spouse makes more money than you, keep that in mind. If you live near your family and those left behind will help care for the children, keep that in mind as well. Before figuring out exactly what you think you need, remember that life insurance is only for what you can’t live without. If you die, your spouse won’t need a new car or vacation. You need time to organize your life and enough money to get by without major lifestyle changes, either up or down. Finally, if don’t decide how much you need insurance until you know the cost. The best way to get the best price is to visit a website that helps you find and compare top-rated providers with the best rates and coverage for you.
If you want to keep things simple and straightforward, you can buy life insurance. Life insurance is called a term because it is offered for a specific period or duration. Policies renew each year with the same payment amount you originally purchased, whether it’s $10,000, $50,000, $500,000 or $1,000,000. The premium increases every year because every year you get older and closer to death. However, most policies are now sold with fixed premiums for a certain period of time and are called term policies. Most companies offer a non-incremental flat rate over 10, 20 or 30 years. Remember that the longer the level, the higher the premium, as the insurance company assumes more risk in subsequent years. With life insurance, you bet you will die and the insurance company bets you will live. The lower your premium, the less likely you are to die. If you die, the insurance company pays a lump sum to your beneficiary.