How Much Life Insurance Do I Need & How Much Does Life Insurance Cost?
Before you buy life insurance you need to figure out how much life insurance do I need? An iQuote advisor can help you figure out how much life insurance you need to protect your family.
How much does life insurance cost? How much life insurance do I need? These are two popular questions that people shopping for life insurance ask. And the two questions are very closely related.
The amount of life insurance you need will directly relate to the cost of the policy. The higher the life insurance policy value the higher the premium will be to purchase the policy. Health, age and smoking habits are also key categories that affect the cost of a life insurance policy. The healthier and younger you are, the lower the cost of your life insurance policy will be. Those who smoke always pay more for life insurance.
If you have dependents, you should buy enough life insurance so that, when combined with other sources of income, it will replace the income you now generate for them, plus enough to offset any additional expenses they will incur replacing services you currently provide. For example, if you stay home with the children you may find that you'll need to hire someone to assist with childcare if you return to work full or part-time. Or if your children are grown, you may still want life insurance to support your spouse or partner or to take care of family members who you may be assisting.
Also, your family might need extra money to make some changes after you die. For example, they may want to relocate, or your spouse may need to go back to school to be in a better position to help support the family. A life insurance policy should take into account these types of expenditures so that your family can maintain their standard of living.
Most families have some sources of post-death income besides life insurance. The most common source is Social Security survivors' benefits. Many also have life insurance through an employer plan, and some from other affiliations, such as an association they belong to or a credit card. Although these sources might provide some income, it is rarely enough.
Remember, the primary purpose of life insurance is to ensure you have enough capital to provide adequately for your family when you are not there to provide for them.
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