As we navigate through everyday life, it can be easy to let life insurance slip to the back burner. A lot of the time, we’re focused on our day-to-day expenses, which can leave us less prepared for the unexpected, furthering the risk of not having enough life insurance.
Life insurance is a smart and cost-effective way to protect you and your family’s financial future, but many are underinsured or have no life insurance plan at all. This can often be because of the concern around cost, but actually, life insurance can be more affordable than you think and can save you so much more in the long run.
What are the risks of not having enough life insurance?
The biggest risk of not having enough life insurance is that your family will not have the adequate financial protection in the event of your passing. It’s not always a comfortable topic to think about, but it’s important to consider the following:
- End-of-life Expenses – Final expenses, such as funeral costs, can cost thousands of dollars. Without life insurance, your family may have to tap into savings or an emergency fund to make sure everything is covered.
- Day-to-day Expenses – Thinking about what you and your family spends money on in everyday life, consider whether your loved ones would be able to continue the same lifestyle and spending habits if your income was lost.
- Mortgage – If your survivors don’t have enough money to pay off debts such as a mortgage, this could lead to a greater risk of them potentially losing the home.
- College – A higher education is expensive, and supporting your children until they are financially independent becomes much harder with the loss of one household income.
- Retirement – Many term life insurance policies can end before retirement, but it’s an important asset to consider, as it can ensure your significant other can reach retirement age without being financially burdened.
What are the benefits of life insurance?
One of the biggest benefits of life insurance is the peace of mind it can bring you and your loved ones. If you have any financial dependents—a spouse, children, business partner, etc.—a life insurance policy can ensure they’re protected financially if the unexpected were to happen to you.
How can I determine the right amount of life insurance?
Determining the right amount of life insurance for you starts with understanding what to take into consideration. You should think about your income, age, family makeup, any current financial responsibilities and future plans, as all of these would be important factors in the event of your passing. It can seem intimidating to start thinking through which type of life insurance is right for you or how much coverage you need, but our life insurance calculator can help you get started determining the right amount of coverage for you.
Find the right amount of life insurance with SelectQuote.
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