How Much Life Insurance Do You Need? From United of Omaha Life Insurance Company or Companion Life Insurance Company
Deciding the amount of death benefits to include in your life insurance policy may be a challenge for some people. You may not think about all the expenses related to your own death, as well the potential financial obligations that will be left to your family. Taking an honest assessment of how much money will be needed to finish your obligations and what your family will need to meet their needs is challenging, but necessary. A life insurance policy that has excessive death benefits may put a strain on your current finances, whereas a life insurance policy that does not have enough benefits may cause problems for your family.
United of Omaha helps you determine how much life insurance may be necessary for your situation. Our agents and our online tools may help you determine the proper benefit amount for your policy.
Determining Your Need
First, it's important to recognize that your ideal life insurance benefit amount can't be decided by a simple equation. Online calculators and questionnaires are worthwhile for research, however, keep in mind they don't know your personal situation or goals like you do. This is where an agent can come in handy. A licensed insurance agent can speak with you and get to know your personal goals, helping provide context for the numbers produced by the calculator.
There are several key factors to consider when determining your death benefit amount:
- Are you attempting to maintain your family's lifestyle?
- How much financial impact do you expect your death to cause?
- Are you totally replacing your income or supplementing their income?
- Do you want to pay off existing debts?
- Are you providing for college expenses?
Life insurance death benefits may not pay off every cent of debt left behind or replace the income of the deceased. Some life insurance policies proceeds would be used to help pay costs like outstanding medical expenses and funerals. Others may help set up the remaining family in a debt-free situation. Still others provide a combination of the two, helping to pay off death-related expenses while providing income for the family.
If you plan to replace your income completely, you may need a substantial amount of benefits.
According to the Federal Trade Commission, the average burial can range from around $6,000 to more than $10,000. This provides a starting point for your coverage. From there, you may want to add an additional amount to help cover possible remaining medical costs.
Planning for the Future
You also want to take into account investments and retirement benefits when figuring your benefit amount. If you have a healthy portfolio, you may not need life insurance to cover things like living expenses and lifestyle. If you have a well-funded college fund, paying the extra life insurance benefits to cover education might be unnecessary and redundant.
Have a long talk with your agent and family members when considering your benefit amount. This should should help in determining your true life insurance needs.
It may be difficult to choose an exact amount that provides for every need. After all, the future is uncertain and you cannot predict every twist and turn. Try to choose an amount that falls into a general range, and remember that having the benefits of some insurance can outweigh having no insurance. Even if you don't get the number exactly right, your family will have some protection against financial concerns.
Call your local United of Omaha agent to set up a consultation on your potential life insurance benefit needs today.
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