Every parent wants to teach their children good financial habits and sense. That includes things like investing early, keeping debt at a minimum, and setting aside an emergency fund.
But what about you?
Interestingly, while parents are often very good about teaching their children sound habits, they often ignore their own advice. It’s human nature to not deal with certain things until they’re upon us; insurance is one of those things. And most Americans are severely underinsured.
The Value of Life Insurance for Families
Most people do not have enough life insurance. Obviously needs change and evolve over time, and it would seem that families need life insurance more than single individuals. Life insurance can secure college educations, allow mortgage payments to be met can even help the family business continue.
The Value of Life Insurance for Individuals
However, single individuals need insurance, too. If parents or siblings are older or in need of care or even have disabilities, then life insurance might be necessary to sure they’ll be secure financially. Certainly anyone who has people depend on them, for whatever reason, needs life insurance. An additional benefit of life insurance for a single person in a high tax bracket, is that it would allow the person to use permanent life insurance to accumulate wealth on a tax-deferred basis.
How Much Life Insurance Do You Need?
Life insurance is generally calculated based on three factors. Human life value, or the economic loss that a family suffers should the primary income-winner pass away is one way to determine how much life insurance is needed.
Another way to calculate life insurance is to actually consider how much you might need. Maybe you have a checklist of family expenses that need to be met such as college education, car payments, mortgage payments or long-term care facility payments.
The third consideration is that you need to know how much you can afford to pay in premiums now while still creating the kind of secure future you want for your loved ones. Spend some time with your budget and look for ways you can save. There’s a wealth of available free resources available to help define a plan that is right for you and your family’s needs.
The preceding post had information provided by Genworth Financial