We all hope to be here for a long time, but nobody can predict the future. You can’t know what tomorrow holds, never mind what things will look like 10 years from now. That’s why it makes sense to give yourself and your family some peace of mind. A well-chosen life insurance plan protects the people you love whatever happens. Here are 4 points worth understanding about life insurance.
1. Women Usually Pay Less for Life Insurance
Only 56% of women carry life insurance, against 62% of men, even though coverage costs women less. Because women tend to live longer, their premiums are lower than men’s in every state except Montana. What does that look like in practice? As a rough guide, a healthy 30-year-old woman can buy a 20-year, $500,000 policy for about $17 a month.
2. You Can Need Coverage Even Without a Paycheck
A common assumption is that only the family’s main earner needs life insurance. That’s simply not true. Staying home with children is hard, demanding work, and replacing it would be expensive. If everything a stay-at-home parent handles were paid out to a housekeeper, nanny or au pair, the bill would come to roughly $113,000 a year.
A sensible life insurance policy means the family can keep covering everyday needs if the stay-at-home parent dies.
3. A Workplace Policy Probably Won’t Cover Enough
Many employers include life insurance as a benefit, but those policies often fall short. They typically pay out one or two times your yearly salary, which is far from enough if you have a spouse or kids depending on you. The coverage also stops if you leave the job. The safer route is to keep the work policy as a bonus and pair it with an individual policy you buy on your own.
4. Aim for 5-10 Times Your Yearly Salary
Working out the right amount of coverage isn’t easy, and it’s often a question for professionals. The usual guidance from people who know the field is a policy worth 5-10 times your annual salary. Even so, simply replacing your income may not go far enough. Think about your child’s college fund, your mortgage and the many other costs your family carries. To get a clearer figure, try this free online life insurance calculator, which can help you settle on the coverage that fits your situation.
