Life insurance is often misunderstood.
The typical term life insurance policy for someone in their 30s to 40s is around $500,000. Some people get more, although as people get older, they tend to get less since the premiums may be too high. In general, however, you can expect a new term life insurance policy to start at around $500,000.
For someone without life insurance, that can seem like quite a lot.
But what if it isn’t?
What if it’s not enough?
Life insurance is designed to provide financial protection in the event of an unexpected tragedy. You cannot replace a lost life, but you can replace some of the financial support that they would have provided if they had been alive. In that sense, how much is $500,000?
If you make $50,000 a year, that is only 10 years of income. If you make $100,000 a year, that is only 5 years of income. If you’re a young person in your 30s or 40s, your lifetime earnings would have been much more than that. That doesn’t include anything to leave to your heirs, or losses from funeral costs.
So when you are calculating how much life insurance you need, remember that the purpose of life insurance is to make sure your family can focus on grieving your loss without worrying about the loss of income and financial support in the short AND long term.
Now, as you get older, your life insurance needs may change. Sometimes, they’ll go up, as you look to pass assets to heirs. Sometimes they’ll go down, because you need less on a fixed income. There are also other forms of life insurance with different premiums and different benefits that may affect your decision.
But it helps to understand what life insurance is for, so that you can find the best policy for you.
LET ME HELP!
If you need help navigating the insurance world, reach out to me today and let’s start a conversation.
Please contact me at https://davisinsurancegroupllc.com/ or book with me directly at https://calendly.com/bradleyadavis.