How do you decide how much life insurance you need? Here are some things to consider.
What Is Life Insurance?
I didn’t think about life insurance much until I had kids. My oldest daughter Emma was born, and suddenly it was important to make sure she would be okay.
This is where supplemental life insurance comes into play. Companies like Aflac (the sponsor of this post) sell this type of insurance. In the case of life insurance, you nominate someone who will receive the funds if something happens to you. There are other forms of supplemental insurance, like hospital indemnity insurance, where the payout goes directly to you, unless otherwise assigned.
But how do you know how much life insurance you need, and why should you be thinking about this right now? Here are some things to consider.
When Should You Buy Supplemental Life Insurance?
If you are roughly my age, you’re probably pretty healthy. Why buy supplemental life insurance from a company like Aflac? Here are three reasons that motivate me:
- There are no guarantees that something won’t happen to me.
- I don’t have a lot of money saved up to pass on to my kids if something happens to me.
- You can often lock in lower life insurance rates by buying at a younger age – before health problems set in.
How Much Life Insurance Do You Need?
There isn’t a one-size-fits-all number here, but here are things to consider:
- How much money do you have saved up for your family to live off of for a while if something happens?
- Are there any debts that would need to be settled if something happened to you?
- What do you want to be sure your family can still afford if you are gone?
- Does your employer offer any life insurance as a job benefit? Remember, of course, that these benefits disappear if you lose or change jobs.
- How much life insurance makes sense, given your family budget?
This isn’t something that is fun to think about, but it’s important! Mike’s dad died of cancer while still very young. His death, while expected after a long fight, was devastating. I don’t think you ever truly recover from losing a loved one. Mike’s dad had thought to invest in supplemental life insurance, and that allowed his family time to grieve without having to stress about their finances.
How did you decide how much life insurance to buy for your family?
Policies may not be available in all states. Limitations and exclusions may apply. Benefits are determined by state and plan level selected. Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York. WWHQ | 1932 Wynnton Road | Columbus, GA 31999.
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.