Life Insurance: Do I Need it and How Much is Necessary?
Life insurance can be confusing. Do you need it? How much do you need? Do you need the same amount all throughout your life? It really is not a confusing as it sounds. The important thing is to first determine whether you need life insurance, which kind is best for you and carefully calculate how much you need.
Do I need life insurance? If you have dependents to protect and do not have enough savings, you definitely need insurance. You want to make sure you have enough insurance to cover your debts. If you have a $200,000 mortgage and a $4,000 car loan, you need at least $204,000 in your policy to cover your debts. Another important reason to have life insurance is for income replacement. It helps replace income that would be lost with the death of a wage earner. This ensures your dependents do not incur significant debt when you die. Life insurance may allow them to keep assets versus selling them to pay outstanding bills or taxes
What kind of life insurance do I need? There are a variety of different types of life insurance. The kind of policy you should have is dependent on your needs. If your main concern is to protect your family against a loss of your income, term insurance is the way to go. If you want to protect your family against the destruction of your business or estate taxes after your death, whole life or universal life insurance should be considered. Visit our website to learn more about term, whole and universal policies.
How much life insurance is enough? Some experts say you should have enough life insurance to cover five to 10 times your annual income, especially if you have a young family. The answer really depends on how much money your family and/or dependents will need after you’re gone. A professional insurance agent can help you determine your needs and find a coverage that works. You can also use the “Life Happens” need calculator to help you crunch the numbers.
Purchasing life insurance does not need to be confusing. The experts at Lenz-Balder can provide you with a policy that meets your needs and your budget. Give us a call to get started or click here to request a quote and get started!