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Considering life insurance? Here’s how to get the right type of policy - Part 3

When it comes to actually purchasing a life insurance policy, most consumers wind up asking the same important questions: How much life insurance do I need, and how long do I need my policy to last?

Here are some final tips on our Life Insurance series "Considering life insurance? Here’s how to get the right type of policy"

How much life insurance do you need?

At the end of the day, only you can decide if you want life insurance coverage in place until the day you die or only for a specific term. However, the price of different types of life insurance coverage may ultimately help make this choice for you. After all, permanent life insurance premiums can easily set you back 10 times more than term life insurance coverage in the same amount.

Generally speaking, you’ll want to make sure you have enough life insurance coverage to replace most of your income during your working years. Or, if you prefer, you can follow the rule of thumb that says you should purchase a minimum of 10 times your income in life insurance protection (so $1 million in life insurance if you earn $100,000 per year).

As you spend time comparing different policies and deciding how much coverage to buy, you may want to consider the following factors:

  • How much you earn each year, including salary and bonuses;

  • Health insurance benefits and other perks your employer offers that would need to be paid for after your death;

  • Debts that your estate would be responsible for after you’re gone, including any personally guaranteed business loans, a mortgage, car loans, and other obligations;

  • How many working years you have left before retirement. Whether you want to pass an inheritance to your heirs;

  • The cost of your final expenses and disposition;

  • Whether you want an insurance benefit to cover the cost of college tuition, family weddings and other major life events after you’re gone.

Should you buy life insurance?

Most people should have some type of life insurance protection in place, even if coverage is only enough to cover their final expenses. After all, your dependents and other family members will be left to pay your funeral costs and other final expenses once you pass away. Without life insurance, this could create hardship and stress on them at a time when your loved ones will be grieving your passing.

Still, many individuals and families make the choice to buy enough life insurance coverage to replace their entire income during their working years, and potentially their entire lifetime. Consumers typically do so in order to make sure their remaining loved ones don’t have to struggle if they pass away, and that dependents can continue their current standard of living. With enough life insurance, you may even be able to leave a legacy for your heirs.

Fortunately, life insurance — and especially term life insurance — doesn’t have to be expensive. In fact, based on our research, right now a 30-year-old man in excellent health could purchase 20 years of term life insurance worth $500,000 for less than $27 per month, and a woman at the same age and in the same health could buy this coverage for less than $21 per month.

Regardless of the type of life insurance, you may want to buy, your best bet is to take steps to apply now — as in today. The older you get, the more expensive life insurance becomes. So don’t let life slip away before your family is protected, or you could easily regret it.

Source 資料來源:


EPIA inc. is a private Insurance Agency with no ties with legal entities. The information contained in this article is based on information provided by CNN's Official Website. Consumer questions on how to file their federal or state income taxes should be referred to a tax professional.

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