Life Insurance Reality Check: Do You Have Enough?
Life insurance is something that no one likes to think about. All the same, 86% of Americans believe that life insurance is something most people need, and most of us have some.1 That’s the good news.
The bad news is that most Americans don’t have enough. More than a third don’t have any life insurance at all, and those who are insured have coverage equal to less than four times their annual income.2 Most experts believe that coverage equal to 10 times one’s annual income is a more reasonable rule of thumb.
Do you really need $250,000, $500,000, $1 million or more? Sounds like a lot of money, but imagine if one of those amounts had to pay for a funeral, retire credit card balances and other debts, support your loved ones for many years to come, and help cover college costs. Would it be enough?
Doing the Math
To start, estimate what your family members would need after you’re gone to meet immediate (i.e. funeral), ongoing (i.e. rent or mortgage, other everyday bills) and future financial obligations (i.e. college and retirement). Then, add up the resources your surviving family members could draw upon to support themselves. These would include things like a spouse’s income, accumulated savings, life insurance you may already own, etc. The difference between the two is your need for additional life insurance. This mathematical equation may seem simple enough, but coming up with all the inputs can get tricky.
Call or e-mail me today for a thorough analysis of your needs and help in determining the right amount and type of life insurance for your specific goals and situation.
1LIMRA and Life Foundation 2011 Insurance Barometer Study
2LIMRA International, Trends in Life Insurance Ownership, 2011
Credit to LIFE a nonprofit organization www.lifehappens.org
