Life insurance helps give your loved ones a greater financial cushion than what you’d be able to provide on your own. It’s easy to have an internal debate over what type of life insurance to choose, and the policy size you must have in order to fulfill your wishes. But getting the right amount of life insurance isn’t as complicated as it seems – you can get what you need by assessing the financial circumstances of you and your loved ones.
What Is Your Financial Situation?
This is important because this entails what you’re able to afford, and the types of expenses that may be passed down to loved ones.
If you have many debts, a smaller life insurance policy may be ideal. You want to make sure you’re able to afford the monthly premiums. If you miss payments or surrender your policy due to being unable to keep up with the costs, your loved ones will not get anything.
If you have a mortgage and have dependents living with you, you may want to get a policy that will cover the outstanding principle so that your loved ones will be able to continue living in your home after you pass away. This may either influence you to get a policy that is just large enough to cover remaining mortgage payments or have a larger policy so that your loved ones will also have enough to cover their personal expenses.
If you have a larger income with few debts, you can obtain a more sizable policy without worrying about being able to afford higher premiums.
What Are Your Loved Ones’ Financial Circumstances?
While you may not be able to determine how much your loved ones own or owe, you can still get an idea based on what you know of their financial commitments. For example, if your beneficiary is younger, you may want a policy that will cover education expenses.
It’s a good idea to devise a plan for how you’re going to allocate the life insurance payout. This may also give you a clearer idea as to how much life insurance you need because you will be able to figure out how much you want to leave behind for each beneficiary.
You may also want to have enough life insurance to cover your funeral expenses. Your exact expenses may vary depending on funeral arrangements and whether you choose to be buried or cremated. If this is all you want to cover, you can opt for a policy with a payout that is just enough to cover these costs. Otherwise, you can factor funeral expenses into the overall calculation of how much life insurance you need.
Get Everything You Need Right Now
At Fidusure, we want you to be able to leave a great legacy. We will help make sure your loved ones will be taken care of after you’re gone, and we’ll get you a perfect policy that matches your needs to a tee. Call us today at (647) 567-4702.