You need life insurance. Even though 85% of consumers agree with that statement, only 62% have it. In fact, it is estimated that 70% of U.S. households with dependent children would struggle to meet their needs within only months in a situation where the primary wage earner died. That is scary.
And even if you do have life insurance, without an annual review, coverage is often out of date. If you’ve taken a new job or had a change in family, such as marriage or the birth of a child, or have changes in assets or debts, you’ll need to adjust your life insurance plan.
Make sure that if something happens to you your family does not become a statistic.
Get your LIFE right; the right AMOUNT, the right TYPE, and the right HELP.
The Right Amount.
Around 75% of Americans have employer provided life insurance of some kind. Yet, too many of us simply rely on that being the right amount. The right amount may differ depending upon your personal circumstances. While generally speaking 10x your annual income might be a guideline, if you are parenting a special needs child or have elderly parents or large families depending upon you, you might need more than that. If you have fewer dependents or large amounts of liquid assets to bequeath on those you’ve left behind, less might be appropriate. Income is not the only factor. In the case of the death of the stay at home parent or caregiver, it is critical that their life insurance can provide for the help that will be needed in his/her absence. The key is to look at your individual circumstances to make sure your coverage will take care of those you love in case of your untimely death.
The Right Type.
There are SO many life insurance products out there. Whether it be term life, whole life, guaranteed universal life, index universal life, return of premium policies, variable life, cash value…and it goes on and on… each has it’s unique characteristics. As you determine the type you should purchase, make sure you think about the opportunity cost of the money you spend on life insurance. For example, cash value insurance tends to be much more expensive than term life. What could investment of that extra money yield if you were to spend less on your insurance policy? How could those investments influence the lives of those you leave behind? If you choose term, what is an appropriate term? Make sure you look at the big picture of your finances when you determine the right type of insurance.
The Right Help.
Life insurance can be confusing and it can also be big money, both out of your pocket and in the pocket of the company you choose. That is why it is particularly important that you find an agent who is willing to help you analyze the different types and provide a recommendation for what is best for YOU, as well as the willingness to review your policies annually to make sure they still fit your needs. The only people who enjoy obsessing over the details and contingencies of these types of plans are those of us in this field. Getting the right help…someone you feel you can trust to be the expert and to have your best interests at heart…can make the difference between being prepared and being unprepared.
Life insurance can be a complicated thing to get in order but, for the sake of those you leave behind, it’s something you want to get RIGHT.