How Much Life Insurance Do You Need?
Everyone needs a life insurance policy for two reasons. One is that you will need money to pay for your funeral expenses and outstanding balances at the time of your death. The second reason is that your survivors will need some form of income to cover the expenses you paid while living. Many employers provide a basic life insurance policy, one that will cover funeral expenses, but not necessarily leave much for surviving family members. Check with your employer to find out how much insurance you currently carry. Then ask about the possibility of increasing this amount if you could pay your own additional premiums. But don't automatically sign up for this option. Instead, compare the cost of extra insurance through your employer with other quotes you can get from local independent insurers. Ideally, you want to leave enough money to make up what you would have earned until your children are raised. If you have no kids or they are already grown, you still may want to leave them some sort of inheritance to take the place of any later monetary gifts you might have bestowed, such as helping with the down payment on a house or contributing to the grandchildren's college fund. In addition, you will want to ensure that your spouse is provided for. If the house remains unpaid at the time of your death, it may be difficult for one person to manage the monthly mortgage payment alone. Try to get enough life insurance to pay off the home and any other debt the two of you may have incurred, with enough of a balance to see your spouse through any tough financial times that may develop. Talk with a life insurance agent soon to find out how much coverage you need, and have, so that you can make additional arrangements if necessary.
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