Thursday, March 21, 2013

How Much Life Insurance do You Need?

How big should your insurance umbrella be?

I am well past the age when "dependent" means much to me.  But I do know the cost of dying can be a worry.  If you have children that are still dependent on you for any reason, your need for insurances jumps considerably. Here is some very good information from Life Insurance Quotes website.
How much life insurance does one need?
If you are thinking about  subscribing to a life insurance policy, you might want to know how much  life insurance you actually need. Subscribing to a policy that is beyond your needs would be an inefficient way to handle your finances. Below, you’ll find things to take into account so that you will know how much life insurance you need and how much you should be paying on a monthly basis.

Number of dependents
Your life insurance needs should be calculated  based on the number of dependents that you have living with you. For instance, if you have children, your children would be considered your  dependents. They rely on you for your income and without those finances,  they would struggle immensely. Additionally, a spouse or significant  other can be considered a dependent as well. These are individuals in  your family that are supported by your income and would need financial  assistance if something were to happen to you. Life insurance can be  calculated based on how many dependents that you have. For instance, if  you have more than one child, you are going to need a much larger life  insurance policy than someone with just one child.

Severity of their dependence
Similar to how the number of dependents that you  have can affect how much life insurance you need, the severity of their  dependence on your income is equally important. For instance, if you are the only person in your family that works and your spouse is a  stay-at-home parent, then your entire family would be dependent on your  income. This would be a very severe dependence and it would increase the  need to purchase a substantial life insurance policy. The more your  family relies on you for the income that you have then the greater the  need to increase your policy.

Your age
Although your age is not typically a factor that  will affect your need for life insurance, it is something to take into  account. Life insurance policies are recommended for anyone with a  family or dependents and it’s not something that is age dependent.  However, as you approach your old age, the risk of health concerns  becomes far greater. Old age comes with a weaker immune system and deteriorating health, which could be a concern if you have a family that  is dependent on your income. The older you are, the greater your need  for a life insurance policy in order to secure the financial stability  of your family.

Your health
If you have pre-existing health conditions, your  life insurance premiums are going to be substantially higher than if you  did not. However, it’s never too late to subscribe to a life insurance  policy and if you are developing health problems, it’s important to  speak to a financial advisor about your options.
There are lots of factors that can affect your need  for life insurance. If you have a family that is dependent on your  income and if you are concerned about their financial stability, life  insurance is a reliable option.
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  1. In addition, don't forget that when a spouse dies you lose some of you income from Social Security and potentially from other retirement sources.

  2. My last term insurance policy, taken out to give my two grown kids a hand in their young adulthood, expires in two years. For the rest, we're lucky to have a handle on possibilities.

  3. Juhli, I think you have a very good point. My husband and I are dependent on each other. Our income will remain essentially the same because we chose to take less on our retirement now so that could happen. But, if you have not taken care of that an insurance policy could help.


  4. Thank you for stopping by Shelley.



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