Life insurance isn’t for you, it’s for those left behind


Your choice for life insuranceI overhead a conversation a couple days ago, he asked his friend, “How much life insurance do you have?” His friend replied, “I have enough to take care of my family if I die, but so much that they want me dead!” It got me thinking more about life insurance.

Life insurance, especially term insurance, helps take care of those left behind. I typically go through a few different questions when determining how much you need. Here are some of those questions if you’re wondering how much you need.

Final expenses – How much will your funeral be? Did you die with medical bills outstanding?

Debt – Your income is your biggest asset. Your income was also helping to pay down bills such as a mortgage, loans and maybe credit card debt. If your income is gone, will your spouse be able to pay the bills? Will your assets be seized to pay for outstanding debt?

Education – If you have children, did you intend to help them through college? Are they currently going to a private grade school?

Income replacement -You and your spouse are working towards goals of your own. If you die, many of the goals still remain. Retiring at a cabin up north with the grandkids, going on a vacation to Ireland, experiencing the Australian outback or taking your family to Walt Disney World. If you leave this earth, don’t forget to take care of those left behind. It’s not just money, it’s dreams.

Special needs – Are you taking care of elderly parents? Do you have a child with special needs that depends on you? If you are gone it’s a good idea to have funds set aside so they can continue to receive the quality of care they were receiving with you.

Often times the life insurance needs are $1,000,000 or higher. This is a lot of money, but’s it’s really not a lot over a lifetime, or to satisfy all of these needs. Final expenses could be $25000, debt could be $300,000, education could be $200,000, income replacement could easily be $500,000, special needs could easily exceed $100,000. When you really consider what the financial impact would be if you died and left a family behind, I hope you see the real need to evaluate what the true number is that you need. Then ask me if it’s in your budget.

Click here for one example of what happens when you don’t have enough.