Life insurance is something that your family may depend on should you suddenly pass, so it’s important you take smart steps.
Your family may depend on your annual income to pay off important expenses like a mortgage, student debt, car payments, bills, and other important items. If you are to suddenly pass, how will your family pay these debts? Banks and other corporations do not give sympathy cards and expect to receive their money regardless. Without a life insurance policy to financially cover them, trouble and financial despair could be in their future. To ensure that your family is covered with the right life insurance policy, make sure that you take these smart steps.
- Determine If You Need Life Insurance
Many people do require life insurance, but not everyone. If you are wealthy enough to have no debt and would leave an estate with enough cash to pay its own taxes and expenses, you likely do not need life insurance.
If your financial situation does not match the one mentioned above, your family could be at risk and you need a life insurance policy.
- How Much Life Insurance Do You Need?
a) What financial resources will be available to your beneficiaries after your death?
b) What financial needs will your beneficiaries be left with after your death?
c) Subtract step a from step b to determine the size of your policy. Many people are underinsured, often because they skip these important steps.
- What Life Insurance Best Meets Your Needs?
There are two main types of life insurance policies about which you should concern yourself: term life insurance and whole life insurance. If you only need life insurance for a set amount of time, then you should consider purchasing term life insurance. Whole life insurance covers you for life, even after retirement.