When comparing life insurance quotes online many questions come up that sometimes can cause us to put off getting coverage to a later date, but given that it is a risk protection, that’s not always the smartest thing to do. Lets answer some basic questions to take some of the confusion out of buying life insurance, if you think of something we haven’t answered here please visit our FAQ or Contact Us so we can assist you.
Life insurance, in simple terms, is an insurance product that takes care of your financial responsibilities in the unfortunate, unexpected and inevitable case of your death. That is why it is also known as death insurance.
How does life insurance work?
Life insurance works as an agreement between you and the life insurance company. You agree to pay your premium and the life insurance agrees to pay out your death benefit for as long as you maintain the premium. It is acquired by completing an application with an agent and then followed by an underwriting process to determine your premium based on the financial risk you pose to the life insurance company.
Why should I get life insurance?
While there are many reasons we shop for life insurance quotes, let’s go over getting started with life insurance.
We work hard to take care of our families, providing them with every want and need we can possibly afford. But what happens if we were met with an untimely death? How does our family maintain the same lifestyle? That’s where life insurance comes in. Life insurance allows us to protect our families against the financial burden of our unexpected death, so that they can continue to live the life you hoped to provide for them. Now while we don’t know exactly when we’ll die, according to experts, the chance that we will is 1 out of 1, so its best to get life insurance as soon as possible to protect that risk.
Many Americans have either a mortgage, a car payment, credit cards, loans or all of the above. A life insurance policy can cover your liabilities in the case of your passing. This can be done by getting a life insurance policy coverage amount that would equal your total liabilities so that it would not hurt and harm your family, friends, or business partners.
If you don’t have anyone depending on you financially and all or most of your debt is paid off, you can benefit from whats called a final expense policy. This is a life insurance policy that takes care of the expenses that are a result of your death. It will make sure to cover any financial burden that may befall your friends and family in the form of hospital bills and burial expenses.
How much life insurance do I need?
Like your fingerprint, how much life insurance you need is unique to you. There are many factors to consider when running your life insurance quotes online. Lets take a look at a few scenarios that can help you determine the right type of coverage.
Scenario #1 – I have a spouse and my kids are still in school
The general rule when you have financial dependents is to multiply your annual income by 10-15 years to make sure they can maintain their lifestyle. Then add in the cost of a college education and any final expenses. So the math would look something like this.
10(your income)+College Education+Final Expenses=Coverage Amount
Hate math? Use our Life Insurance needs calculator
Scenario #2 – I have no financial dependents just liabilities
If you have loans, credit cards, and mortgages all you have to do is simply add your liabilities and then subtract them from your assets to determine your life insurance coverage amount.
Final expenses+(Loans+Credit Cards+mortgages)-Assets=Coverage Amount
Or just use our Life Insurance needs calculator
Scenario #3 – I have no financial dependents, everything is paid for, i just want to pay for my funeral and leave a little for my family
Some people just want to make sure their funeral is not a financial burden on anyone and also want to leave behind a little legacy for their family to remember them by. For this our equation is fairly simple.
Legacy+Final Expenses=Coverage Amount
Consider your budget
Now that you know how much life insurance to get and you ran your life insurance quotes for that amount you maybe thinking “okay i figured out how much i need, but i can’t afford that right now.” A good place to start is usually your budget and figuring out what kind of premium you can afford every month and adjust the coverage accordingly. Its a good idea to pick a premium you can afford comfortably for a while in order to make sure the life insurance policy remains in force for it’s lifetime and doesn’t lapse. Its always better to have some life insurance than no life insurance at all, just ask your loved ones and lenders. Remember you can always get more coverage in the future as your situation gets better through a new job, promotion or business growth.
We always recommend running your life insurance quotes online while on the phone with our agents to make sure that any of your questions get answered. Our agent can also do a full needs analysis for you to make sure you can get the right amount of life insurance coverage.