Life Insurance Amounts

Filed Under Insurance |

One day I stopped by a cemetery to pay respects to my great-grandparents. As I was walking up to their spot, my attention was drawn to the headstone next to it. “Oh my gosh,” I said to my husband. “THAT is not what I came to see today.” Apparently my grandparents, who are very much alive, had already purchased their headstone and it was already placed, just like it was waiting for them to die. Smart, I suppose, but it’s still not fun to think about death before it actually happens.

Same goes for life insurance. Smart, but not fun to talk about your death while you are alive and health. But much different from a headstone, it’s too late to talk about it after you’re dead. So we better talk about it now.

How much do you need? If you were to not wake up tomorrow, how much money would your survivors need? Experts say you should have a life insurance policy that is 8 – 10 times your current salary. Even if you don’t have an official salary, such as a stay-at-home parent, you will need to calculate how much money will be necessary if you are gone because there may be more childcare expenses and such.

Think about all the expenses your spouse will be left with when you are gone:

For generally healthy people, term life insurance is dirt cheap.  You should make sure you are healthy anyway, but here is another good reason to be healthy. For example, my husband and I got quotes for term life insurance recently. They took our blood before giving us a quote. My husband’s cholesterol came back in the “high” range, which automatically jumps his rates up to the “high” range. We paid that rate for a few months while he worked to get his cholesterol down. He did, and is now paying a much more reasonable rate for his life insurance.

Make sure to shop around for the best rates. Also make sure you understand exactly what you are signing up for. Get out your glasses and read all of the small print – and understand it.

Lastly, make sure your survivors know how to access the life insurance when you are gone. They should know the amount of the policy and who to contact after you die. After you death the last thing they want to do is dig through a bunch of paperwork so make sure it’s all laid out for them.

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