How Much Life Insurance Do I Really Need?

May 20, 2021 | All Life Insurance Blogs, Life Insurance | 0 comments

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 How To Get the Best Life Insurance for Your Needs

  Life Insurance can be a stressful subject. You are trying to understand the difference between Term and Whole Life insurance and whether your policy from work is enough life insurance.   Then, how do you find the right life insurance agent? Can you buy life insurance from your P&C insurance agent, and how much life insurance do you need to provide the financial security your family needs?   Do you need any kind of a rider? What IS a rider? Are you getting the best life insurance policy for the best price? Will your premiums go up?  

Here Are Answers to the Top 5 Questions About Life Insurance

 

1. Is life insurance worth the cost?

  I can answer this in several ways.   The first is with a statistic from a study.   1 in 4 American households would immediately struggle to financially meet their current living expenses if the person earning the primary income would die today.   That statistic is staggering.   And 65% of American households would feel the financial impact in a year or less.   So, these families are grieving AND worried about how to pay the bills.   Another statistic came from the same study that tells us that 2 out of 3 Americans overestimate the cost of life insurance by more than three times the actual cost!   MORE THAN 3 TIMES!! When you look at the statistics, it’s easy to see that people assume that life insurance is too expensive, so they go without, ignoring the inevitable. However, in making that decision, they put their family in great financial danger.   And much of this is because of MYTH.   Life insurance is and can be reasonably affordable. Often you can get a good policy for less than you are paying for your cable or cell phone bill.  
        *** Side Note Here

Did you know the average end of life and burial expenses in the United States – NOT including the burial plot, vault, and headstone or marker – is nearing $20,000?

That is not a typo – Twenty Thousand Dollars – in the first week or so after you pass away.

Add a burial plot, vault, and headstone, and you’re easily at $25,000 if not more.

Cremation can drop that cost down a bit, but not by as much as you would think. I have posted more information HERE. (Personal experience last year – the headstone was just under $1000, the burial plot and vault for a cremation urn in a family cemetery plot was $750. That did not include cremation.)

Final Expenses are no joke. And ignoring the subject doesn’t make it go away. Planning for it makes it so much better for your loved ones.

You can follow THIS GUIDE and take the guesswork out of it for those who love you.

 

So, is life insurance worth the cost?

  Yes. Yes, it is. It ensures that your family will make ends meet during a time that they should not have to be doing anything other than remembering you with love and gratitude.  

2. Is the Term Policy that I have from work enough life insurance?

  In almost every case, the answer to this is a resounding “NO.”   Having a life insurance policy as part of a job benefits package is a nice benefit. It can also be a healthy addition to a privately owned life insurance policy. However, in and of itself, a term life insurance policy from your employer will probably cover final life expenses and a month or so of living expenses but not much more than that.   Additionally, most job-sponsored life insurance policies are Term policies. They will have to renew. Renewal is typically every five years. And, when a Term policy reinstates, the premium (the monthly, quarterly, or annual amount you pay to have that policy) will increase because you are older.   Furthermore, if you lose your job or quit, it is improbable that you will be able to take that life insurance policy with you.   Therefore, relying solely on a job-related life insurance policy is not the best for financial planning and can be a financial disaster for your family with poor timing.   You are much better off getting a personal life insurance policy that doesn’t rely on your employer.    

3. What is the best life insurance policy?

  This is an often-asked question with an answer that can be a bit complex.   The simple answer is – the best life insurance policy is the one that best meets all your needs currently and can grow and change as you and your family grow and change.   In a market flooded with term insurance plans, whole life policies, assurance life coverage, life insurance dependent on the Stock Market or other sometimes volatile markets, and riders, the choices are seemingly endless and overwhelming.   The KEY to finding the best life insurance policy for YOU is to find a good, honest life insurance agent.   Life Insurance Agents go through specific training to know the market and the industry as a whole.   A good life insurance agent studies the market, knows the products available, and will take the time to ask the right questions and put a policy together that will work best for you now and in the future.   Using a life insurance agent rather than an online “bot” is the best way to create financial security for yourself and your family.   Relying on bots and algorithms can be expensive at best.    

4. What is the difference between Term and Whole Life insurance?

    There are many differences. However, the main differences are:

Term

Whole Life

Less expensiveMuch more in-depth coverage
Only covers you for the “Term” of the policy: 1, 5, 10 yearsIt is created to last your lifetime & support your loved ones when you pass away
It is typically used for things like covering a Mortgage Loan, Student Loan, debt with a  co-signer, or final life and burial expensesIt is typically used to replace income, plan for retirement, ensure loved ones can meet financial obligations if you pass away
Rates will increase if you renew the policyRates will remain the same
Does not assist in transferring wealth or creating an EstateIt can be used to transfer wealth, create an Estate, and help keep your assets out of Probate court
Term life insurance vs Permanent or Whole life insurance
  There are times that a Term life insurance policy is absolutely appropriate. And, sometimes, your Agent can later assist you in transferring a Term policy into a Whole Life policy if done in the first five years of the life of the Term policy.   Working with a Life Insurance Agent is the best way to determine what kind of policy is the best for you and your situation.    

5. How much life insurance do I need?

    This is another question that has a bit of a complex answer.   There are so many things that you want to take into account when looking to answer this question.           Do you have current debt?        What are your household’s current annual expenses?         What is your household’s current annual income?         Do you have children?         Where are you in your career and how much financial growth do you expect?         Do you plan to help children with secondary education?         How much do you have saved for emergency expenses?         What do you currently have in your retirement portfolio? These are just a few of the questions to answer before you can truthfully answer how much life insurance you should have.   To help our clients with the question of “how much life insurance do I really need?”, Hall Benefits has put together a series of Guides and Workbooks. They’re easy to work through, and by the time you are done, you will have answers to this question, the questions listed here and many others.   You can download the Ultimate Guide to Life Insurance HERE for FREE Reach out with any questions you have!   Hall Benefits is happy to help you answer your questions. Send your questions to info@hallbenefits.com   We offer FREE life insurance policy audits. Schedule your audit HERE

You don’t have to be intimidated by life insurance

  Even though it’s not an enjoyable subject, it is a responsible one. There is help. You just have to reach out and ask. You don’t have to do this by yourself.    

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