Life insurance is essential, but there are so many options. Having an open conversation with loved ones can help you decide which policy to choose. It’s important to explain to family members that life insurance isn’t based on the value of each person, only their economic contribution to the household. The following article is an overview of some key points.
Why You Need Life Insurance
Life insurance is for those who depend on you. It helps pay for things after you’re gone, such as medical bills, house payments, and funeral costs. It’s one of the best ways to ensure your family’s financial safety when you’re no longer around.
How Much Coverage is Best?
The amount of coverage you need depends on a number of factors. For example, your income, and how many dependents you leave behind, as well as your family’s lifestyle and debts. However, a general rule of thumb is to purchase a policy worth 5 to 10 times your yearly annual salary.
Types Of Policies
Employer policies, if they even offer one, only provide coverage as long as you’re employed there. Here’s a look at some other options:
Whole life policies are both a cash value and death benefit, so it’s the most expensive plan.
Variable life policies are a form of permanent insurance that builds a cash reserve, allowing you to invest. The value of the reserve is based on how well those investments do.
Universal life policies also have investment savings, as well as flexible premium options.
Term life policies offer coverage at a fixed rate of payment for a set time period.
Life Insurance Costs
The cost of life insurance varies depending on the plan you choose, but bundling life insurance with your home or auto insurance policy usually offers valuable discounts. A trusted insurance agent can explain how policies work in more detail.
Schedule a time to go over your options with us at (925) 447-1744.