Every day, we help clients develop a plan to achieve their financial goals and part of that is making sure they have the right insurance in place to take care of their loved ones if something happens.
Life insurance in an important part of your Financial Plan. It doesn’t sound as fun to talk about life insurance as it does to talk about saving money or investing but it is definitely important.
How Much Term Life Insurance Should I Have?
If you listen to The Dave Ramsey Show, you have likely heard Dave recommend having 10-12 times your income in term life insurance. That is because term insurance is usually fairly inexpensive and you can get 10-12 times your income at a very affordable rate. At that amount of life insurance, if something happens to you, it allows your loved ones to pay off the house, any other debt you may have, and continue to live the lifestyle they are used to. That way, they are not grieving and trying to figure out how to pay the bills at the same time.
Is the Life Insurance at my Job Sufficient?
If you have life insurance at your job, that is great but we still recommend getting it outside of your employer as well. This is for 2 main reasons….
- The amount that is offered at your employer is usually not enough to be fully insured so having additional insurance is a good idea.
- If something happens and you leave your employer (quit, get laid off, etc) and in the meantime you develop a medical issue that causes you to be un-insurable, then you won’t be able to get life insurance on the market.
Where Should You Get Life Insurance?
Just as you would shop around for car or home insurance, we think it is a good idea to get quotes from a couple insurance companies in order to find the best rates for your life insurance. Our team would be happy to do that for you if you are interested in having it quoted.
What Term is Right for Me?
When you are trying to decide what term you want for your life insurance, you have to think through when you won’t need life insurance any more. When will the kids be grown and gone? When will your debt be paid off (including your home)? When will you have enough savings that if something happens to one of you, the other one will be okay, financially speaking?
Of course, you can always apply for new insurance later on and increase the term that way, but thinking through what you need now is best because life insurance is cheaper the younger and healthier you are.
Other Things to Note…
- If you have life insurance (term or whole life or something else) and would like to get a quote for a different policy, it is always best to get the new life insurance in place before cancelling your current life insurance policy.
- Be sure you are re-evaluating your policies on a regular basis. Did your income increase and now you need to increase your amount of insurance? Is the term still sufficient for you? It is always a good idea to re-evaluate your important documents on a regular basis and this is true for your life insurance policy!
- Even if one of you stay home with the kids, it is still important to have life insurance on you. This is because the value that you bring to the family is tremendous and all of those tasks would be expensive to replace if something were to happen to you.
Life insurance can be complex and there are a lot of questions that come up when you are thinking about how much you need, so if you have questions about your specific situation, please feel free to reach out to one of us and we would be happy to help.
Whitaker-Myers Wealth Managers, LTD is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.