How Much Life Insurance Should be Purchased
Find the Right Agent to Determine the Amount of Coverage Needed
Choosing a life insurance plan and life insurance agent can be a stressful and unpleasant experience because nobody likes to think about his or her own death and who will be left with what afterward.
Because of the general dislike of the subject, people often put off getting a life insurance quote, but this is not wise, especially for those who are the primary income-earner in a household with dependents.
Find a Reputable Life Insurance Agent
Shop around town for a trustworthy life insurance agent . Ask friends and family for their advice. Choosing a good life insurance agent is important to avoid buying too much or too little insurance.
Meet with at least five different insurance agents (preferably both independent and contract agents) before settling on a single agent. Determine the best agent by the one who listens, does not push too hard toward a single plan and finds balance between both what is required and what is affordable.
Once the person to be insured has chosen an agent, he or she will work with the agent to calculate post-tax income and remaining life expectancy to determine a figure.
How Much Life Insurance Should be Purchased
After a figure has been determined based on the insured person’s income and age, outstanding debts are factored in. These debts often include house mortgages, car and business loans and credit card debts, but will factor in any unpaid debts. At this point, the insured person should add in potential unseen medical costs and funeral expenses.
If the insured person has a spouse who earns income, he or she should also have life insurance. Keep in mind that his or her income can help defer post-death costs, but childcare costs might have to be factored in if young children are in the picture.
The insured may want to factor in additional costs into their insurance plan, such as money for children’s college educations or money to care for a dependent spouse.
Purchase Enough Insurance Without Overbuying
While life insurance is a must-have for any income earner with dependents, he or she should be cautious not to purchase more insurance than he or she can afford.
Life insurance agents can be persuasive, so do not fall into their persuasion without questioning their reasoning. Life insurance purchasers should never sign onto a plan they do not fully understand or do not feel comfortable with.
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