Life insurance means you need to have enough money for your dependents and loved ones in the event of your disappearance. Determining how much life insurance you need can be questionable, so follow these tips to determine how much you need when you build your policy.
1. Income and Dependents
If you currently take care of dependents and plan to do that for so many years, you’ll need a policy that covers at least your salary times the number of years you plan to take care of them. For example, someone with a 10-year-old dependent, making $50,000 a year, may plan to take care of them for the next ten years. This means that the policy should be at least $500,000.
2. Outstanding Debt
Suppose you have any outstanding debt when you build your policy, including mortgages and property loans. In that case, you’ll need to ensure that your policy includes that amount to cover those debts so your loved ones can continue enjoying the property you leave behind for them.
3. Final Services and Costs
At the time of your passing, services and costs will be associated with your remains. Based on the type of final service you want for yourself and your loved ones, leave enough funds to make arrangements so that they do not have to mourn your passing, and try to find the funds necessary to cover these expenses.
4. Gift
If you want to leave a certain amount of money for your loved ones and dependents, set aside that amount specifically for them. You can ensure that each person gets a certain amount for college tuition, a down payment on a home, or anything else you want to pay for.
If you’re in the Birmingham, AL area and looking for a life insurance policy, contact us today to get your quote. At Birmingham Insurance Agency LLC, we look forward to speaking with you soon.
