At many companies, it is open season for employee benefits. Every year, Beth and I have a discussion about how much life insurance we should have for each of us. The real discussion has less to do with each of us than it has to do with taking care of the kids. At the end of the day, we want to make sure that most of our debt (mortgage included) is paid off and that a healthy fund is set aside for them to all go to college.
Do I Need Life Insurance?
Everyone is going to have their own needs for life insurance. According Jason Alderman’s article “Life Insurance 101,” life insurance is not “one size fits all.” Our needs as families and as individuals change as we go through various stages in life. As a single adult, maybe you choose to have no life insurance at all. When you get married and have kids and a home, you may drastically increase your coverage just to be sure that the family doesn’t struggle if something happens. After the kids leave the next or you pay off your home, you may feel comfortable lowering your coverage substantially.
Remember that premiums are typically much lower when you are younger. If you think that you might want life insurance at some point, it might be smart to lock in a rate earlier rather than later. This can save you loads of money down the road!
Life Insurance Options
Obviously, one large consideration in choosing your level of coverage has to do with what you can afford. Getting your coverage through your employer would, likely, be the most affordable option for most people, but there are several affordable life insurance options out there.
Whether you choose Universal, Term, or Whole life insurance really depends on how long you are looking to keep your coverage. Are you looking for something short term while your kids are too young to take care of themselves or are you looking to make sure that your spouse doesn’t have to work into his or her retirement years? Some people who have planned their retirements out very well still maintain just enough insurance to cover burial expenses for their families. I figure that, if I can’t leave my family an inheritance, at least I won’t leave them with a bill!
Do you have life insurance for your family? What do you think about when you decide on your level of coverage? Leave us a comment and let us know!