“How Much Life Insurance Do I Need?”
I hate this life insurance question.
I hate this life insurance question because I have no way of knowing how much life insurance you need or if you even need life insurance…
I hate this life insurance question because this is the first question 95% of Life Insurance purchasers ask…
I hate this life insurance question because it perpetuates the misunderstanding that there is some arbitrary coverage amount that will fulfill an individual’s needs…
So, How Much Life Insurance Do You Need?
I recently had a home and auto insurance client of mine call me about life insurance.
Client: “Ryan, my wife and I would like to get some life insurance. “
Me: “Great, life insurance is important for a young family like yours.”
(We had discussed life insurance as an important part of their personal insurance program in a previous meeting).
Client: “Run me a quote at 500k term life insurance!”
Me: “Why 500k term life insurance?”
Client: “That seems like a good number…”
Client: “…………………..” (Silence)
My client had asked himself, “How much life insurance do I need?” and 500k popped into his head without thinking about his family’s needs, priorities, and goals.
Building a Life Insurance Program that Works for Your Family
For some families a simple $150k term life insurance policy for Mom and Dad might work perfect.
Other families may have need for a whole life insurance or universal life insurance product (permanent life products). Others yet might need/want to hold multiple policies combining the advantages of term life insurance and permanent life insurance to satisfy their need.
However, you will not be able to determine what program works best for you and your family unless you ask the right questions…
“How much life insurance do I need?” over simplifies the process.
If you are going to pay the premiums on life insurance why not buy something that works for you?
A Few Good Life Insurance Questions
- How do I currently pay my household bills? Could my spouse pay the mortgage, heat, electric, cell-phone, cable, food, gas, and car expenses if my income was no longer available? With only one care-giver remaining how will your spouse pay for child care?
- What outside financial responsibilities do I have? Does a parent, grand-parent, or other relative depend on me financially? Would anyone be able to pick up the slack if my income was no longer available?
- Do I want to help my children with their primary or secondary education?
- Who will my personal debt fall upon and how will they pay that obligation after I expire? How much Credit Card debt do I have? What personal or business loans do I have that could fall to my spouse or dependents?
- How much will my final preparation cost?
Can you see the value in asking these questions over “How much life insurance do I need?”
Asking all these questions may not dig out all the financial and parental obligations in your life. Call us today at (518) 456-6688 or click here to email one of your NY life insurance specialists and make sure you purchase life insurance that suits your unique need.