Have Enough Life Insurance?The Simple Truth May Surprise you!
Responsibility to Your Family
In your lifetime you make sure you work hard and give your family the best and provide them a happy lifestyle. Your savings, loans, mortgages, and investments provide your them with a much desired safe and secure life which would last forever, but you can only personally see that this happens duringyour lifetime.
What about When You are No Longer There?
Have you thought about thatdaywhen life suddenly stops; when suddenly one day you are not there for them anymore? Have you considered how much financial impact your death may have on your family?
If you want to provide for your family after you pass on, you need to ensure that they are:
- Debt-free
- Financially well provided for
- Not harassed by creditors
- Live in the same house bought by you
- Going to the same schools and colleges
- Financially covered in every aspect as provided by you
Can Savings Suffice?
You may say that you have your savings. Savings are the amount you may have set aside in the past plusinterest like fixed deposits,stocks and shares, and other forms of assets.But the question is, is it enough?Most of these assets are subject to market risks and depreciation.So, the issue arises as to whether you will be able to secure the lives of your loved ones without having anylife insurance once you are gone.
Benefits of Life Insurance
Life Insuranceis thatassured sum of money youwish to have paid in the event of your death. It is that money you spend for agiven number of years, and in the event of death, your loved ones are paid an amount easily and quickly.Their financial security is not disturbed by premiumsor outstanding dues claimed by any creditors.
How much insurance would you need?
Do you have enough life insurance? The total amount of coverage you need would widely depend on your overall financial situation.Let’s understand how it works under the following circumstances:
- Situation one: You need just enough insurance to pay for aparticular debt like ahouse or college fund for children. In this case, you might justget enough insurance to repay that debt, and the survivorscontinue to work.This calculation is pretty easy – just add the amount of debt you would like to cover, and that is exactly how much insurance you’ll need.
- Situation two: You want to provide for all your family’s needsso that they don’t have any financial difficulty after you are gone.In that case, you need to add on to all that you want to provide forand get insured for the total amount.
Also, life insurance needs are incredibly inexact, so sometimes you just decide on a reasonable and acceptable amount and go with it.After understanding the situations mentioned above, you may ask:
Why should I go for insurance when I have Life Insurance through work?
It’s a valid question. However, insurance from work changes as you change jobs. Groupinsurance formwork is based on generic assumptions – it is not custom-made as per your family’s needs. Employer-paid policies usually don’t replace as much lost income as people absolutely need.
But I’m a stay-at-home parent
Good point!However, just because you’re not generating income does not mean that you are not contributing towards your family’s income. What you add is priceless. But to put an economic value to the work done by you, the family caring for elderly andchildren or cooking and so on, if a professional is hired for that job the family pays for that job, it doesn’t come cheap. So, be sure you don’t undervalue your contribution to the family by skipping life insurance coverage.
I work-out and eat lots of kale!
Awesome! Continue to live a healthy lifestyle. Looking after yourself is just what you really need.In fact, you can enjoy the fact that you could be eligible for reduced premiums as an incentive with your healthylifestyle; you can make use of the lower term life insurance cost available to you by exemplary exercise and diet habits.
Hence, you can say that the type of life insurance you need varies according to your particular life situation. It’s a personal decision based on a range of factors including your debts, mortgage, and potential college costs for your children and ultimate burial expenses.
How Much Life Insurance do I Really Need?
Do I have enough life insurance? A useful life insurance needs calculator can help you to decide the same. Bankratecalculates just how much life insurance you need determined by factors such as your age, the ages of dependents and your income.Your premium rate rises as you grow older.
In your analysis you need to take in to account different need-based aspects like:
- Daily provisions
- Utilities
- Health
- Education
- Transportation
This would further depend on your family members’:
- Lifestyle
- Their age
- Health-condition
- Care of a special-needs family member
- House mortgage
- Household maintenance
- How long this financial support will be needed once you are gone
The purpose of Life Insurance is to cater to your financial planning of short-term and long-term to cover all the aspect mentioned above.
The commonestand cheapest option is term life insurance which is valid for a specific number of years and is the simplest means of controling risk to keep future alternatives for life insurance coverage available.
What the Statistics Show
Based on the nonprofit industry group Life Happens; 63% of Americans consider life insurance is a necessity and 30% say they don’t have enough coverage. 19% only have group life insurance coverage (the coverage that’s available through work and often does not provide enough money to meet a family’s needs generally) also based on Life Happens, and industry group LIMRA,43% have none after all
Make Life Insurance your family’s safety net. Calculate your present, gradual and future needs and get enough Life Insurance to protect your family even after you are gone. A knowledgeable insurance agent can find you the best policies for your needs. It requires information about your health, profession, age and specific details of your dependents to provide a complete picture.
Life Expectancy Factor
Insurance vendors determine your insurance needs and rates based on your lifestyle. No one can envisage precisely how long a person can live.For a long time, actuaries and statisticians have been tracking average lifespan and the factors that tend to increase or decrease life expectancy. They use reliable life insurance needs calculators to estimate your Life Insurance needs.
The most essential elements that influence life expectancy are beyond anyone’s control. Your lifespan depends on many things; some affect it directly and some indirectly.
Factors that may affect directly
Your genetic makeup, lifestyle, habits, temperament, what and exactly how much you eat, how much you exercise, whether you engage in individual sports such as mountain climbing, scuba diving, piloting private aircraft, driving habits, the extent to which you use drugs and alcohol, are all factors that may influence your life expectancy.
Factors that may affect indirectly
The city you live in, the overall environment, pollution around you, water and food sources and supply.
The factors mentioned above play an important role in increasing or decreasing your life expectancy, backed by your ability to change and improve your life in general.
Life Insurance Helps to Expect the Unexpected
Finally, it’s your life, and as a conscious and able-provider it’s vital that you aim to have a long life. By purchasing suitable life insurance, you create a safe and secure living environment for you and your loved ones. Theknowledge that your life is insuredwill give you the freedom to live a happy, comfortable and long life. Contact your insurance agent today to check out your options in getting suitable life insurance for you and your family.