Life insurance can help your loved ones meet their expenses and maintain their standard of living in the event of your untimely death. The following are a few things to consider as you determine the amount and type of coverage to purchase.
- How much money will your family need to cover the lack of your income? Are you close to retirement, or are you providing for a young family? The coverage you will need is tied to the amount of income you would need to replace in the event of a premature death.
- What debts do you have that your family will need to pay? These may include a mortgage, automobile loans, student loans, credit cards, and so on. Remember to take into account funeral expenses as well.
- What specific expenses would you like to cover for your family in the future (general living expenses, college, weddings, etc.)?
- Will your family need to replace your annual income, or will your spouse’s income be sufficient for their needs?
- At the very least, purchase enough coverage to pay your debts and funeral expenses.
- Make sure the policy you are purchasing has premiums you can afford long term. You are better off purchasing a smaller policy with lower premiums you can fit into your budget. If you purchase a policy with premiums beyond your capacity to pay, you risk letting the policy lapse due to missed payments.