How Much Life Insurance Do You Need?

The need for life insurance fluctuates throughout your life. It rises and falls with the amount of accumulated assets you need to protect should you die unexpectedly. Generally, when you're young and old the only insurance you need is final expense coverage. During middle ages you'll need to expand upon your final expense coverage to insure liabilities.

Child

When you're a child, life insurance is very inexpensive, but it's also fairly unnecessary. Children are protected and typically not in very dangerous situations. The main reasons to get a Whole Life policy on your child is to protect yourself in case something happens to them, so you'll have money for funeral expenses. Buying into a whole life policy for a child is also a wonderful investment for them, one which grows a large cash value account while maintaining extremely low premiums. They'll have access to the cash value when they become of age, which they can take a loan out of to help with schooling or what have you. At the very least you will help them lock in the lowest possible rate for a whole life policy that will pay out to your grandchildren when your child grows old and passes on.

Young Adult

Now is when most individuals start to accumulate assets / liabilities, raise a family, and grow debt. If you have a child or parent financially dependent on you, you should get a large Term Life policy for a low premium. This will protect your liabilities and assets and leave behind enough money for your family to maintain their standard of living should you die unexpectedly while still young. Protect your home, business, and funeral expenses with private life insurance policies. They will be very inexpensive due to young age and it will be worth the protection, just in case. I know many people who have lost their parents young. I also know many lives lost too young. There are no guarantees in this lifetime, make sure you're doing your best to protect what you love.

Middle Age

This is the time to reach out to an insurance company and secure a private policy if you've been relying on work insurance to cover your major assets / liabilities. Most insurance through work is very inexpensive, taken out monthly directly from pay, and is usually a pay out of double or triple your yearly salary. The problem with work coverage comes when you're at retirement age and stop working, meaning your coverage stops too. If you quit or get fired the coverage goes away too. This is the time you'll want to insure your funeral expenses for the future will be covered, while the price is still relatively low. It will be more expensive then the price as a young adult, but still affordable with a fixed income.

Golden Years

This is when your coverage should be in place and everything should be taken care of. You should have 100% peace of mind that you won't be leaving behind debt, your funeral will be paid for, and your legacy is well preserved. Earth burials cost around $10,000 on average depending on your area. This is determined upon purchasing the casket, the fees from digging the plot, the cost of a headstone, crypts, flowers, fees and any extra added costs. Cremations cost around $7,000, again depending on what exactly your family chooses for you and where you're located. 

___

Always have a face value with an amount larger than your debts, liabilities, and funeral costs combined. Insure yourself to ensure your family will have enough money to survive comfortably until situations are changed to provide enough income for a single person / parent to pay the bills if your income was cut off forever.