Everyone wants to protect their loved ones, but does choosing the right amount and right kind of life insurance have you confused? After all, the policy you choose could be the tool your family relies on if you or a spouse passes away unexpectedly. While your life insurance agent is the most reliable source for calculating your life insurance needs, we have put together a checklist to help you get started.
Choosing a Life Insurance Policy
The first question – and the most obvious one – is, “do you need life insurance at all?” For the majority of people, the answer is a resounding, “yes.” Everyone, including young, healthy, college-age students and empty nesters can benefit from a life insurance policy custom tailored to fit their needs. The next step is determining which type of life insurance is right for you. According to Forbes, term life insurance is a must for anyone with dependents for whom they need to provide guaranteed income replacement for years to come. Otherwise, a whole-life or universal-life policy might be your best choice – especially if you wish to take advantage of living benefits or protect your family against estate taxes after your death.
Calculating Your Life Insurance Needs
Start by calculating how much money your family needs on a monthly basis to cover household expenses. Include any savings your income contributes to, as well as any match provided by your employer. From there, consider the costs of your family’s long-term goals. Do you plan to pay for a child’s college tuition, a wedding or first vehicle? These one-time expenses can add up to tens of thousands of dollars or more and should be included in your death benefit. Finally, assess your debts, and purchase enough coverage to pay off personal loans, credit card balances and other liabilities that could otherwise be burdensome to your loved ones in the future.
Remember that life insurance is designed to protect anyone who benefits from your income or services. With that in mind, you should purchase life insurance not only for yourself but on those who provide you with financial benefits as well. For example, you may decide to purchase a life insurance policy on a valuable professional employee on whom much of your business relies. You may also want to purchase life insurance to help fund a buy-sell agreement with your business partners. According to the American Institute of CPAs, life insurance is an effective way of protecting your family and ensuring a smooth sale of your share of the business if you pass away prematurely.
Get Expert Advice from a Trusted Insurance Agent
If you are unsure how much life insurance is right for you and your family, let Andreotti Insurance assist you in evaluating your needs. We can help assess every area of your family’s finances, taking into account cost of living increases and inflation. We don’t cut corners when making sure your loved ones are financially secure regardless of what the future may hold. Call us today for more information or to request your free quote. We look forward to serving you soon.