Life Insurance Basics
Do you determine how much life insurance you should get? While this is a complicated question for most people, there are some quick rules of thumb. First, the more dependents you have, the more coverage you need. Second, if your spouse is younger than 40 years old and does not have a job that offers insurance benefits, then it's advisable that they purchase health insurance separately from their spouse. Third, the older you are, the less coverage you need. But if you're young and have a family to support, then you should take out more insurance.
How much coverage is enough? According to the Council for Economic Outreach (CEA), most people require about 25 times their annual income in terms of life insurance. However, if you have a partner who earns less than $50,000 per year or has big health or education expenses, then that amount will certainly go up.
If your family depends heavily on your income from both of you being working to make ends meet then a bigger policy will likely be necessary when it comes to life insurance. However, if the cost of living is low where you live and your family is financially self-sufficient for several years without your income, then you might not need as much coverage.
You also want to consider what will happen to your family if your partner dies. First and foremost, will they be able to maintain housing? Will they be able to continue paying their mortgage payments? The answer to this question should vary based on the area in which you live. Typically, housing prices are lower in the Midwest where we're located, and it takes income from two sources to afford a home. However, housing prices can also be quite high in places such as California or New York where it only takes one income to comfortably afford a nice home.
The same applies for utilities. In most places, two incomes are required to afford the typical household bills, but this might not be true in cities where the cost of living is very high. Therefore, instead of using 25 times your annual income as a guide for how much life insurance to purchase, you might want to consider the fact that you need more coverage if you or your spouse are providing excess financial support to your family.
Individuals looking to get a life insurance quote online should check out our partner American Advisors Group for all their coverage needs. If you want to learn more about life insurance, including the different types of policies available and how much coverage should you get, then read our previous articles:
Should You Get Life Insurance?
10 Life Insurance Myths
Lifesaving vs. Lifelong Coverage and More Coverage Basics at CEA.com
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About the Author:
If you want to learn more about life insurance, including the different types of policies available and how much coverage should you get, then read our previous articles:
Should You Get Life Insurance?
10 Life Insurance Myths
Lifesaving vs. Lifelong Coverage and More Coverage Basics at CEA.com __________________I had no insurance for my mother when she passed away, so I don't know how much does it really matter if I do or don't?" - DrewThis post was originally published at http://www.cea.org/life-insurance-basics#sthash.CTHd0QmV.dpuf . Please leave any comments there. Thanks & be well. :)
Posted by CEA at 10:35 PM No comments:
Let's say a baby is born in the midst of financial hardship. In such a case, would you open a whole new credit card or benefit plan for that family? I think that insurance plans should only be used when someone is going to die. When someone is suffering from poor health, it is best to take advantage of Medicare and other options for treatment, but you shouldn't have to stop working or pay high medical bills just because you have limited insurance coverage for your family. Take a checkbook and write down all expenses that will eat into your savings. Then buy life insurance that can cover them if they occur. For more information, contact the Council for Economic Education today.
www.cea.org/life-insurance-basics#sthash.CTHd0QmV.dpuf
About the Author:
If you want to learn more about life insurance, including the different types of policies available and how much coverage should you get, then read our previous articles:
Should You Get Life Insurance?
10 Life Insurance Myths
Lifesaving vs. Lifelong Coverage and More Coverage Basics at CEA.com
What is the difference between life insurance and disability insurance? One of the main differences is that you can get either one, but not both. And while most people only need one type of policy, there are a few who might need both. If someone has a severe case of disability, they might also need disability insurance to help pay for their medical bills and other needs. It's important to note that life insurance companies will not cover your assets in case of disability. You will have to purchase your own disability insurance policy from the same company that provides life insurance policies for you and your family members.
www.cea.org/life-insurance-basics#sthash.CTHd0QmV.dpuf
About the Author:
If you want to learn more about life insurance, including the different types of policies available and how much coverage should you get, then read our previous articles:
Should You Get Life Insurance?
10 Life Insurance Myths
Lifesaving vs. Lifelong Coverage and More Coverage Basics at CEA.com __________________My dad just turned 100 and I want to buy him some life insurance, but he doesn't have much saved up for retirement funds." - LaceyThis post was originally published at http://www.cea.org/life-insurance-basics#sthash.CTHd0QmV.dpuf . Please leave any comments there. Thanks & be well. :)About the Author:If you want to learn more about life insurance, including the different types of policies available and how much coverage should you get, then read our previous articles:Should You Get Life Insurance?10 Life Insurance MythsLifesaving vs. Lifelong Coverage and More Coverage Basics at CEA.com
Let's say a baby is born in the midst of financial hardship....
Conclusion
When things get tough, you need the right kind of insurance. Life insurance should be on everyone's minds at all times. It's easy for us to take care of our needs by putting money away for a rainy day, but it's an entirely different thing to plan for the unexpected. You have the ability to insure your loved ones, and set them free from debt and worry in case of your sudden death. However, if you are not prepared with enough life insurance coverage, it could become a problem.
Conclusion
When things get tough, you need the right kind of insurance...
You can never know when your time will come.
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Life Insurance Basics