How much life insurance does someone need?
The reality is no one on this planet NEEDS life insurance. Life Insurance is a WANT. If you were to die unexpectedly and you have a stay-at-home-wife and 3 young kids, surely, they would survive. Sadly though, they may lose their house and end up on the streets, or in a one-bedroom apartment, or living with a family member, but they would survive. Perhaps your widow would have to remarry in order for your children to be well taken care of.
The amount of life insurance you get ultimately comes down to this: Do you want your family to live a worse life, an equal life, or a better life, financially, after you are gone? Would you not want your family to live the best life possible?
You and your family have goals and dreams. These goals and dreams may depend on two incomes or they may depend on the breadwinner’s income and the other spouse holding down the fort and taking care of the family. It’s a team effort. It requires the effort of both individuals to live the life you’re currently living. The goals and dreams for your family should not change just because you’re gone.
When considering life insurance coverage, here some things to ponder:
- Everything in life is becoming more expensive
- Due to inflation, a million dollars today will not be a million dollars 5 years from now
- As you go through life, your lifestyle increases and goals change, so will the amount of life insurance needed to maintain the comfort of this new lifestyle
- If you can’t afford your current lifestyle with one income, your spouse surely can’t afford it when the other passes away
- When you pass, your spouse may end up with a higher tax liability due to “single” status
- There will be bills that need to be paid, funeral costs, and possibly even estate taxes
- You may have a business. This means you have a family and employees depending on you. Proper planning will increase the chances you family, your employees, and your business will be taken care of when you are gone.
Do the right thing and make sure your family is taken care of if something should unexpectedly happen to you.