How Much Life Insurance Do I Need?

It’s no secret that insurance can be complicated. There’s a lot that you need to know, so it can be helpful to work with a professional. They’ll be able to provide you with individualized information and support so that you can be sure you’re making the right insurance decisions.

The Purpose of Life Insurance

There are multiple reasons why people choose to purchase a life insurance policy. Many people purchase policies because they want to provide for their family in the situation that something happens to them. Life insurance policies award a “death benefit” if the individual dies during the duration of their policy. This money can be used however the beneficiary sees fit. Some people will use life insurance as a source of monthly income, while others may pay off their house or car. Because the beneficiary can spend the death benefit however they’d like, life insurance is a very universal and accessible way to financially provide for those close to you.

The Different Types of Policies

There are many different types of life insurance policies. One of the biggest differences between policies is how long they last. If you choose a policy that isn’t permanent, then the death would need to occur within the duration of that policy in order for the death benefit to be paid.

Another factor between policies is how much the death benefit is worth. This is an extremely important thing to know and make sure that your beneficiary is aware of.

Picking the Right Amount of Life Insurance

How much your policy is worth will most likely correlate to how much your premiums are. If you want a higher death benefit, then you’ll need to pay more monthly. This makes sense because life insurance is typically paid for by the amount of money that’s put into the policy.

If you’re looking to make a substantial financial contribution to your family in the event that the death benefit is paid, then you’ll most likely want to select a bigger policy. However, if those that are close to you are financially sufficient, then you might want to consider selecting a smaller policy.

Regardless of the type of life insurance policy you choose, it’s important that you have guidance from an insurance professional. We’re here to make sure that you have the resources you need during the policy selection process. Feel free to give us a call today to make an appointment to speak with a member of our team!