Many people understand the need for life insurance, they may have seen a family provider pass away unexpectedly, and watched the survivors struggle financially during a time that was painful anyway. Or they may have been raised in a family that emphasized the importance of being prepared of bad times.
But not everybody who needs life insurance has gotten around to actually buying a policy yet. They may not know which kind of life insurance they should buy. They wonder about finding the best term life insurance quotes, or they want whole life insurance explained so they understand their choices. Some people who search for life insurance want to know if they should buy life insurance for children.
Furthermore, people really do not know how much life insurance to purchase. One of the most common questions a life insurance agent will hear is, How much life insurance do I need?
I think a good place to start is with money owed on a home, or with rental payments that need to be made into the future. If a family has only one breadwinner, or if the other parent does not make enough income to pay all of the bills, it is really important to have the security of a place to live.
Next, look at debt. Debt payments can really eat into monthly budgets, and poor credit from late payments hurts worse. So if one provider would pass away, it would be great to have a way to pay down debt. Having a home and reliable transportation all paid off is a great comfort.
Future education expenses should be considered. Lots of people think of the children’s education, but they may not think of the spouse being re-educated so he or she can make more money in the future. Along with that expense, may come additional child care, help around the house, and help with repairs. Even if the spouse that passes away is not a breadwinner in the home, they do perform services that will need to be replaced. Can you imagine how much it would cost to replace the taxi driver, housekeeper, cook, and baby sitter that many people call a wife! Likewise, husbands are likely to perform routine repairs around the house, and believe me, it is expensive to hire a professional to do them.
And of course, final expenses need to be considered. Funerals average 8 thousand dollars in the US, and can costs much more in some areas. Other items, such as medical bills, travel expenses, and possibly, transporting the body can come up after an unexpected death.
You need to think about how certain bills could get paid if one breadwinner would pass away. Balance this need against your current budget. If you purchase more life insurance then you can afford right now, then you are likely to drop the policy when the first unexpected bill comes up. Of course, a dropped life insurance policy will not do you any good at all.
One way to buy enough life insurance to cover a home mortgage, also called mortgage protection insurance, is to buy decreasing term life insurance which goes down in value as the home loan is paid off.