In this Article
Term life insurance is an affordable, dependable type of life insurance that’s a great fit for most people. If you have a mortgage or carry debt, term life insurance ensures that your loved ones aren’t left with this burden when you’re gone.
With monthly premiums as low as $20 and customizable policy options, term life is adaptable enough to fit your needs, no matter what stage of life you’re in.
The coverage amount you select will affect how affordable your monthly premium will be. It’s also an important amount that should reflect how much financial support you want to provide to your loved ones.
Everyone’s needs are different when it comes to the amount of life insurance coverage they’ll need, but one simple trick is to calculate five to ten times your annual salary. This amount will give you a rough estimate of how much insurance would support your loved ones if you weren’t around to help with the family bills. You might need more or less coverage than this estimate.
If you have dependents and want to help pay for their college education or you own a small business, your coverage amount may increase. If you’re confident in your savings and retirement funds, you might need less coverage.
If you’re carrying debt, the amount of debt you currently have and could have in the future will factor into how much life insurance coverage you need. You’ll want to consider if you have any debt that’s cosigned with your spouse, such as your mortgage. When you’re calculating how much life insurance you need, you’ll want to factor in these costs so your loved ones would be financially prepared to pay off these debts.
In most cases, debt collectors cannot go after life insurance proceeds, and the death benefit will be passed to your beneficiary. If you pass away and have debts, they’ll likely be passed through your estate. In some cases, if your beneficiary is your spouse and you cosigned a debt, a collector could come after that debt.
It’s important to discuss the debt you’re carrying with your insurance agent if you have concerns about how much life insurance coverage you need.
If you have life insurance through your employer, you’re off to a great start! However, in most cases, relying on this coverage alone won’t be enough financial protection for your loved ones.
Generally, employer-sponsored coverage only amounts to one- or two-years’ salary, which is usually not enough to support your loved ones in the same way that an individual term life insurance policy would.
It’s best to calculate your term life coverage needs while excluding your employer’s coverage, and then factor this policy in, adding your spouse or loved one as the beneficiary to both policies.
Your beneficiary will receive both policy payouts when you pass away, meaning that they’ll have the financial protection they need without relying solely on life insurance through your employer.
If your term life insurance policy has guaranteed level premiums, you’re probably locked into that policy for the extent of coverage. If your needs change in the event that you paid off a mortgage or built up a great savings plan, you can get in touch with your Quility insurance advisor to discuss your options.
If you end up needing more coverage due to having another child, purchasing a more expensive home, or your income increased, you might want to purchase a secondary term life policy with a different term length. We can help with that too!
Let’s Get Started