Keeping Your Loved Ones Safe with Life Insurance

6 min read

Your loved ones are at the center of your world. You pour your heart and soul into providing for them, ensuring their safety and security. But what if life takes an unexpected turn, and you're no longer there for them? No one wants to think about that happening. However, considering the emotional and financial impact of passing away can help you create a sturdy foundation for your family’s future. That's where life insurance can help.

A life insurance policy pays out money (also known as a death benefit) to your loved ones (beneficiaries) if you pass away. This payout can make a significant difference for your family during a very difficult time.

So, what should you understand about life insurance to ensure your family's financial security? Similar to others, you probably have plenty of questions like:

How much coverage do I need?
I already have life insurance through my employer, so do I need additional coverage?
What is the process involved in obtaining life insurance?
Are there other important details I should be aware of?

Take a moment to relax, catch your breath, and put your worries at ease. We're here to address your inquiries, helping you assess whether life insurance is a prudent choice for your family's financial well-being.

How to figure out your life insurance needs.

Life insurance can seem intimidating right out of the gate because of a central question: how much coverage do you need? Fortunately, there's a straightforward approach to getting a helpful policy for your family. A good rule of thumb is to make the payout amount (death benefit) ten times your annual income.

For example, if you make $60,000 annually, consider purchasing a $600,000 policy. This coverage means your family could receive $600,000 if you pass away. That amount can help cover numerous expenses and keep your family afloat while they grieve and face an onslaught of life changes.

But remember, life insurance isn't a one-size-fits-all kind of thing. Your circumstances can clue you into what amount of coverage makes sense. There are many factors to consider, so let's review some of them.

Check your debts, like mortgages, loans, or credit cards, to make sure your life insurance covers them and eases the financial load on your loved ones.
Look ahead to those big expenses, like your kids' college costs, and think about how they affect the coverage you need.
Imagine how long your family would need financial help if something happened to you – whether it's a few years or longer.
If you want to leave a little extra for your loved ones or support a cause close to your heart, include that in your coverage plan.
Don't forget about inflation; make sure your coverage keeps up with rising costs for basics like food, fuel, and clothing.
Account for any savings, investments, or other life insurance you already have, as they can help reduce the extra coverage you require.

I have group life insurance through work, isn't that enough?

Now, if you have life insurance through your employer, you might think no further discussion is needed. But not so fast - life insurance through your job usually provides a death benefit of 1 to 2 times your annual income. Based on the considerations we discussed earlier, that might not always be enough.

For example, if you're looking to send your kids to college or pay off a mortgage, you might need more coverage to ensure those financial goals are met. Plus, if you leave your job, you'll typically lose that employer-provided life insurance. So, it's not something you can always count on. That's why it might be worth considering a separate policy to complement your employer coverage.

That way, you're setting yourself up for a solid financial foundation to support your loved ones no matter what life throws your way.

What's involved in the life insurance application process?

When you're thinking about getting life insurance, it all kicks oﬀ with an application form from the insurance company. The form is like having a chat with them on paper, answering questions about your health, lifestyle, and sometimes even your hobbies. It's a health check-in to see how you're doing.

Based on your answers, the insurance company will decide whether to give you the green light and, if so, how much it'll cost you. If you're in good health and living a healthy lifestyle, you'll likely get the thumbs-up at an affordable price. That's why it's a good call to grab life insurance while you're young and fit – it locks in a better deal.

Now, if you're aiming for a big coverage amount (like over a million bucks), they might want to dig a bit deeper. They could ask for more info, like checking your blood pressure, noting your height and weight, and running some basic blood tests. This way, they ensure the coverage matches your situation.

Once you're good to go and your policy is up and running, remember to stay on top of your premiums, which are payments you make to keep your policy active. Setting up automatic payments is a smart move – it's easy, and you might even snag a little discount.

Keep in mind that life insurance is about looking out for your loved ones, making the effort to get it sorted is an expression of care and consideration.