While it’s never fun to contemplate your own mortality, it is necessary to do so at some point in order to take steps to ensure that your loved ones will be well provided for in the event of your sudden passing. Specifically, we at Elite Benefits Group encourage all of our clients to invest in life insurance so that their loved ones have some financial security in that worst-case scenario. We also understand that buying life insurance can feel intimidating, so we have put together this article to help make it easier. Considering the following points should help guide your decision and steer you towards the right policy for your needs.
- How long do you need coverage? This question is less morbid than it sounds–we don’t mean that you should calculate how much longer you’re likely to live. Instead, we mean that you should think about whether you want insurance throughout the rest of your life, or whether you only want it to cover you for a certain period. For example, many people choose to carry life insurance only until their children are grown, or until their mortgage is paid off.
- How much coverage do you need? Before you buy life insurance, you should think about the amount of coverage you need. How much will it take to make sure your loved ones are well looked-after following your passing? One effective method of calculating this number is to consider your debts (how much money you owe), income replacement (how much money your family is used to receiving from you, and how long you want them to continue to receive it), mortality (your funeral wishes and costs), and education (as in, what you want for your dependents’ education).
- Who are your beneficiaries? Lastly, you should decide who will receive the benefits of your life insurance policy before you buy it. For some, their beneficiaries will be their spouse and children, but you might want to include other loved ones in your policy.