Life insurance is one of those things that no one really likes to discuss. Many people don’t think about it at all, or simply put it off. Every day is full of so many necessary tasks that finding life insurance your family (hopefully) won’t need for years often takes a back burner to everything else. This equates to people being not only uninsured but also not educated on how much life insurance is actually necessary for their family in the event something should happen.
How To Determine The Best Policy
Many people’s lives have changed dramatically since they took out their first life insurance policy years ago. It’s important to look these plans over to see exactly how much they pay out and the parameters of the plan. Often that amount is not enough to truly protect your family once you’re gone, so it’s important to educate yourself on the amount of coverage that’s appropriate for your family’s needs.
Some experts indicate that the insurance policy should be worth as much as five or ten years of salary. Really, the coverage amount should be determined by your individual situation. Some things to consider:
- Yearly Financial Obligations. Each family is different, but removing one spouse in a family often does not diminish the yearly expenses significantly, especially in a family with a number of children. While some things can be budgeted out, it won’t account for the full loss of pay.
- Family Contribution. Most families today have two working parents, but often one spouse earns the primary income or a larger amount. In some cases, one spouse will be the stay at home parent. In either of these scenarios, it’s common to overlook the need for a life insurance policy for a person who doesn’t earn a sizable portion of the family income. The truth is that the absence of the primary parent can be financially devastating. It’s important that both parties are adequately insured.
- Future Obligations. If large bills such as college tuition payments are on the horizon, those things should be accounted for in the policy.
- Assets. The family savings, portfolio, and any assets should be considered when deciding how much insurance funds would be necessary to continue on comfortably after the loss of a primary earner.
The type of plan a family has may change as their needs change. For instance, many people will lower the amount of insurance once their children are no longer dependent and/or retirement and savings are largely accrued.
Is Your Life Insurance Adequate For Your Family’s Needs?
If you’re not sure that your life insurance meets the needs of your family, now is the perfect time to protect their future. Visit The Florida Bar Member Benefits Insurance Programs to learn more about your Life Insurance options and to find the perfect plan for your family.