You came to a realization that if something was to happen to you, your family would be in a rough spot. So you decided to start looking for life insurance and for a good reason since there is are over 30% uninsured Americans who put their families in jeopardy. Life insurance is not a complicated concept, it just has a lot of different questions such as what type of life insurance do you need, how much coverage do you want, and who will be your beneficiaries. Of course, taking into account your health and lifestyle. You probably stumbled across this article because you have come to the conclusion that you want to purchase life insurance to protect your family’s financials but aren’t quite sure how much life insurance coverage to buy or if $500k is enough life insurance coverage, but don’t worry because here at InsureChance we will help you decide whether or not $500k will be adequate to cover all your life insurance needs. For a quick summary check out the next excerpt, otherwise, read the whole article for a comprehensive knowledge.
- The first thing you need to determine is whether or not you want term life insurance or a permanent life insurance policy. You really can’t move on to the next step, your coverage amount, until you finish this step.
- You honestly can’t protect your family if you don’t know how much you need every month, it isn’t worth guessing. If you die and your family gets $500k what can they do with it? They may be able to invest that money and earn 5% which can amount to $25,000 a year in salary but if your family depends on more than $25,000 a year you need more coverage.
- To assess your coverage amount you should multiply your income by 10 and add on $100,000 per child for college expenses. Then you need to add a couple thousand for your funeral costs and like we mentioned earlier if you have savings you can deduct that from the amount you get after multiplying and adding.
- Both parents or both spouses should be insured because the value provided by you being a stay at home spouse or stay at home parent is valuable and all the things you do need to be replaced.
Term life vs Permanent life
The first thing you need to determine is whether or not you want term life insurance or a permanent life insurance policy. You really can’t move on to the next step, your coverage amount, until you finish this step. Term life is a form of temporary life insurance and only provides you with coverage for a short and specific period of time. Term life insurance is perfect for those who only need life insurance temporarily to fit their specific needs or don’t have a big enough budget for life insurance. Term life insurance is the cheapest life insurance type in the whole market which is why we said that if you don’t have a big budget for life insurance to consider term life. Like we mentioned it only provides coverage for a short and specified period of time, this is where the word “term” comes into play.
Depending on which carrier you decide to buy a term policy you will be given choices of term lengths that you can remain covered for and they vary from 5, 10, 15, 20, 25, or 30-years. When your term policy expires you can choose to cancel the policy if you no longer need life insurance but keep in mind that if you choose to do this you will have to reapply whenever you do need life insurance again and you will not be given the same rate and quote as you receive this time because life insurance companies use your health, AGE, and lifestyle into consideration and those can change in a couple of years.
If you don’t cancel your term life policy it will automatically turn into an annually renewable policy which means that every year you choose to keep your policy you will be renewing your policy for another year but keep in mind that doing this will cause your premiums every year to increase incredibly! Or depending on which carrier, you may have the option to convert your policy into a permanent life insurance policy without having to go through the whole application and underwriting process again plus you get to keep the same rate you got when you first opened your term policy.
Permanent life insurance has a couple different types of life insurance. Whole life is a form of permanent life insurance which provides coverage for, you guessed it, your WHOLE life. This is the most simple of the kinds of permanent life insurances because it simply provides you with a death benefit and it even provides cash value as well as the other kinds. Universal life is another form of permanent life insurance and again provides you with coverage for your entire life but with flexibility. What we mean by flexibility is that you have the opportunity to change your premiums or coverage amount at any time of the policy because as you grow your needs will grow. Index Universal life is again another form of permanent life insurance in which provides coverage for your entire life with flexibility and an investment option.
Is $500k enough coverage?
If $500k is enough coverage or not is something you have to figure out only because we are not aware of your debt and all the information necessary to come up with the coverage amount that best fits your situation. You honestly can’t protect your family if you don’t know how much you need every month, it isn’t worth guessing. If you die and your family gets $500k what can they do with it? They may be able to invest that money and earn 5% which can amount to $25,000 a year in salary but if your family depends on more than $25,000 a year you need more coverage.
We can tell you that half a million sometimes will work in your favor with life insurance companies simply because it’s the next band up from $250,000 This can be a bigger discount in the long run for you and if you want to dabble around with both coverage amounts so you can see yourself which company offers a better rate for half a million than a quarter million you can fill out our super easy quote engine below this article. If you still are debating whether or not $500k is enough coverage or not after reading this article you can feel free to contact us and we can walk you through the whole process so that we can figure this one out together.
Sample Rates for $500,000 30 Year Term Life Insurance
To give you an idea we will use both male and female clients at age 30 that are non smokers. As you will see females pay a bit less for life insurance than males due to a longer life expectancy.
Male 30 Year Old with Preferred Plus Health Class
Female 30 Year Old with Preferred Plus Health Class
How to find out your coverage amount
You should multiply your income by 10 and add on $100,000 per child for college expenses. Then you need to add a couple thousand for your funeral costs and like we mentioned earlier if you have savings you can deduct that from the amount you get after multiplying and adding.
*You can use our need analysis calculator to get a pretty precise idea of what amount of coverage to get.
Work With Us!
When looking for life insurance, we always recommend everyone to shop around for quotes. This way you can make sure you are getting the best deal possible. You never know what another company will offer you and with getting life insurance being one of the most important life decisions you will face you need to make sure you are going with the best deal possible. If you have 30 seconds you should fill out our very quick quote engine below this article so that you can see for yourself what you may be offered in terms of quotes. Not only will you be able to shop for quotes in one place but you will also be able to compare those quotes with other top-rated companies at the same time!
OR you can always take advantage of our FREE services, yes our FREE services, we are an independent life insurance agency who work with over 60 top rated companies but have zero ties with them because our loyalty is reserved for our clients and only our clients. Here at InsureChance, we will check the entire marketplace to get you the best life insurance company based on your needs and rate class qualification. In addition to that, we will do all the leg work for you when it comes to filling out the application and setting up your exam. Call us, chat us or check out quotes for yourself. Welcome to InsureChance!