Life insurance can provide financial protection for your family and loved ones. If something were to ever happen to you, life insurance can help your beneficiaries cover expenses and meet financial obligations such as mortgage payments, legal or medical expenses, childcare, college education, and outstanding debts.
Here are some things to keep in mind when buying life insurance:
1.Determine how much life insurance you need
Every person's life insurance needs are different. A very broad rule of thumb is that your life insurance coverage should be seven to ten times your income. If you have more children or dependents that you’d want to protect, however, you’d want to consider more life insurance. Additionally, if you have outstanding credit card debt or other obligations, more life insurance can cover those costs and prevent the debt from being passed on to your beneficiaries.
2.Consider enrolling in employer sponsored insurance
If your employer offers a life insurance benefit, consider enrolling in it. The cost of a life insurance policy through work is generally more affordable than purchasing an individual policy — just a few dollars a month in many cases — and easy to buy. You don't typically need a medical exam to enroll and your employer has done the legwork of finding a quality policy to offer its employees.
3.Think about supplementing your employee benefit
Your employee benefits package through work is a good place to start but may not meet all your needs. Know how much your workplace benefit covers. If it's not enough based on your personal estimate, you may want to consider supplementing it. Talk to a financial professional for advice on what coverage you may need and be prepared for a medical exam as part of the routine enrollment process for individual life insurance.
4.Review your life insurance policy yearly
As things change in your life, your life insurance needs will too. Review your life insurance policy every year to help ensure that your coverage is still adequate and that your beneficiaries are still accurately listed. If you've experienced a life milestone like getting married, having a baby, or buying a home in the last year, you'll want to make sure your family and loved ones continue to be adequately protected.