UPDATED: Mar 26, 2020
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To protect your family’s financial well-being, term life insurance could be a very smart move. But to figure out how long you’ll need it and how much you’ll need, you need to do a little research and put some thought into it.
It takes a good understanding of your family’s financial position now—and some foresight into your loved ones’ needs down the road—to ensure they’ll have enough funds to continue living a comfortable lifestyle.
Thankfully, online life insurance needs calculators exist (like ours or the one on LifeHappens.org) to help you figure out the term policy length (typically 10, 15, 20, 25, or 30 years) and the amount of term life you’ll need.
Before you use those estimators, however, you’ll need to ask yourself a few questions like those below.
How much will my family need to pay for my funeral and related expenses?
Did you know that the median cost of a funeral in 2012 was $7,045? (That amount doesn’t include the cost of a monument, cemetery fees, and the approximately $1,000 for a vault—which cemeteries usually require.) And rates are trending upward.* Also, don’t forget your family may have to pay for your uncovered medical expenses.
How many years are left on my mortgage and how much are the monthly payments?
A roof over your loved ones’ heads arguably stands as the most important thing worth protecting if anything were to happen to you. While luxury items may be dispensable, a place to live is not. And don’t forget the other things that go into maintaining a home—heat, electric, water, sewer, trash disposal, etc.
How much will my family need to cover other living expenses?
Consider the day-to-day living costs all families incur—groceries, haircuts, cable TV, phone, gasoline, etc. Factor in the cost of inflation and price increases as well. Cable TV and phone rates, for example, seem like they go up every other month.
How long will my kids be in college, and how much will their college tuition and other education-related costs amount to?
A few things to think about: Will your children attend a public or private university? Will they live on campus, in apartments, or at home? Will they work while going to college? Is it likely they’ll receive scholarships, grants, or loans to help offset the costs?
Do I have car loans or other debt? How much and for how long?
Consider both the amount and the funding terms for any outstanding debt your family would be responsible for if the unthinkable happens to you. Do you have auto loans, home equity loans, financing on appliances, etc.?
Yes. There’s a lot to think about, and it all adds up!
But don’t let that scare you away from looking out for those you love.
Term life insurance provides a flexible, cost-effective way to protect your family. So after you’ve calculated the amount of life insurance you’ll need and determined how long you’ll need it, get a quote quickly and confidentially online. You’ve got nothing to lose and peace of mind to gain.
* “Statistics.” National Funeral Directors Association. Accessed 1.12.2015.http://nfda.org/about-funeral-service-/trends-and-statistics.html.