You work hard to provide for your family. Whether you’re the primary breadwinner, a stay-at-home mom or the financial provider for an elderly parent, you should consider buying life insurance to protect those you love most.
If you’re married, if you have children, or if you support an elderly parent, it’s time to think about life insurance. In the event of an untimely death, this insurance will protect and provide for others who depend on you financially. On the other hand, if you don’t have any dependents, you probably don’t need to purchase life insurance.
It’s also important to note that insurance premiums increase with age and are based on your health and wellbeing. If you’re young and healthy, you’re likely to find insurance that’s inexpensive and gives you and your family peace of mind.
How much should I buy?
A good rule of thumb is to purchase enough insurance to cover five-to-seven years of income. If you have significant debt (including a mortgage loan) or small children, consider increasing this to 10 years. If you’re a stay-at-home mom or dad who doesn’t earn an income but cares for the children and runs the household, it’s important to consider the financial value you provide your family.
Your insurance agent can help you evaluate your assets, income, expenses and debt to determine how much life insurance is “enough.” You can also use online insurance calculators to get a quick sense of what you need, and educate yourself further on the topic at the Insurance Information Institute.
What type of insurance should I purchase?
Insurance products typically fall into one of two categories: term or whole life. While some insurance agents may pitch whole life as an investment, it’s best to keep your insurance and your investments separate. Mutual funds and 401(k)s yield a much better return than whole life insurance. Term insurance is dramatically cheaper, yet provides the same financial security for your loved ones. You can get quotes, compare prices and purchase insurance online at sites like efinancial.com, accuquotelife.com and intelliquote.com.