Nobody likes to think about the day they're no longer living their best life, or living at all, but at the end of the day, death is inevitable. Life insurance is one way to ensure that you don't leave your loved ones in a pit of debt. But, how do you know how much life insurance to purchase?
Sitting down and planning for your death is not exactly a common weekend agenda item. That's why our independent agents are there to ask the important questions to help you determine the face value of your life insurance policy to cover your final expenses and take care of the ones you leave behind.
When you purchase life insurance, you pay for a certain amount of cash to get paid out to whomever you choose for when you die. The dollar amount or face value of a life insurance policy is the amount of cash you've determined you want your loved ones to receive.
Unless you're an artist, once you die, you're no longer able to earn money. It's time to look into life insurance when the loss of your ability to earn money would have a negative impact on somebody in your life.
The most common scenarios where people purchase life insurance are
Simply put, if you're death is going to put someone out financially, it's a kind gesture to purchase some life insurance.
The face value of a life insurance policy will vary from person to person based off the type of life you currently live, the type of life your spouse or beneficiary wants to live after your death, your age, your financial situation, and a lot of other factors. With that said, calculating how much life insurance to purchase starts with six easy steps.
The most important of the six steps is step number two and three, and depending on your scenario you'll want to ask yourself the following questions.
Scenario 1: Young couple with no kids
Scenario 2: Young couple with kids
Scenario 3: Older couple minimal debt
*According to the National Funeral Directors Association, the national median cost of a funeral with viewing and burial in 2016 was $7,360.
**According to The College Board, a 4-year degree from a private school in 2033 will cost a mind-boggling $323,900.
There's a chance that you'll calculate out your life insurance policy, you'll work with one of our awesome agents, and you'll realize that you cannot afford your insurance premium. At this point, you'll want to prioritize your policy.
Start with the least important scenarios in your policy and scratch off money until you get to a premium that you're comfortable with. The lower your life insurance policy, the less the premium will be.
Our agents work with you one-on-one to evaluate your finances and help you determine how much life insurance is right for you. Based on your unique needs, they’ll shop and compare policies from multiple insurance carriers. And find awesome protection at the best possible price.
Talking about and preparing for one's death isn't exactly as exciting as preparing for your next vacation. When determining your life insurance dollar amount you need to take the emotion out of it.
That can be difficult, which is why our independent agents can ask the right questions to determine the amount of insurance you need and help you find an affordable policy. That way, all you need to plan is your next getaway.