How to Be Sure You Are Fully Covered When You Pass Away
Universal Life Insurance Company (Photo credit: Thomas Hawk)
Purchasing life insurance can be difficult as there are many insurance carriers that sell life insurance and there are also many different life insurance policies. Many people are confused about how much life insurance they need; moreover, premiums get expensive as the amount of life insurance increases. Yet buying the adequate amount of life insurance can spare families many hardships and also help them protect assets and maintain their current lifestyles in the event of one’s death. If you are contemplating purchasing a life insurance policy, consider these factors when trying to establish an amount of coverage.
Funeral Costs
Funerals, burials, and cremation costs can run into thousands of dollars. Many people prefer to include these costs in a life insurance policy so that their death does not become a financial hardship for their families. Some life policies are designed simply to cover the funeral and burial costs and may even pay the family in cash. Such policies are available through various providers and can lead to great peace of mind knowing these costs will be taken care of and pose no burden to the family.
Mortgage
Many people take out a life insurance policy particularly if their salary is required to help pay for the mortgage. The life insurance policy, whenever possible, should at least be enough to pay off the mortgage in the event of an untimely death. Otherwise, the family may simply not be able to afford the home and will have to endure the burden of trying to sell their home and move on top of the emotional stress they will be feeling. A life insurance policy that allows the family to pay off the mortgage will be a great relief to them and ensure that they keep their roof over their heads.
Family Lifestyle
Even if a life insurance policy will pay for the house, will it also be enough to provide for you’re the family’s current lifestyle? How much is enough? It’s essential to factor in other expenses like car payments, monthly bills, and possibly even enough for a cushion so that the others have time to adapt to a new way of life without their loved one. Life will certainly change in many ways after the death of a spouse or parent, for instance, but if a life insurance policy is adequate, it can make life financially easy for the people left behind.
Children
Many people consider the cost of college when determining how much life insurance they need for their family. College is immensely expensive and a policy could help cover the costs. Moreover, without this coverage, children may have to go deeply into debt to pay for their education which is not something many parents want to happen if they can avoid that expensive scenario.
There are many expenses to consider when determining an amount, but these are some of the main expenses to keep in mind when making that decision. Talk to your life insurance carrier for more tips and advice for choosing an amount of coverage.
Jeff Noble has been assisting Canadians to insure their homes for over a decade. He also enjoys blogging where he gets to share his insights.
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Category: Family Finances, Insurance
