Everyone needs life insurance, even those who do not think they need it. Even if you are single with no children, you still need to have life insurance in place in the event that something happens to you. Invariably, there will always be business that needs to be taken care of after death. Life insurance is a means to provide help and support after you are gone. Use a number of different factors to calculate the life insurance that you will need for your loved ones.
Calculate your Responsibilities
Most people have required a number of different assets during their life. For many this means a home, an education, vehicles, and other belongings. Often these items come along with loans or a debt load. If you currently owe on any loans, you need to calculate debt to help figure the amount you need before getting life insurance quotes. For those who are the primary breadwinner of the family, this is especially important as you do not want those you care for to lose the home or other assets you have built on top of losing you. For homes, be extra careful. Be sure to factor in what is owed on the loan as well as taxes or maintenance for a set amount of time.
Providing for Children
Everyone wants to make sure that their spouse and kids are taken care of if they pass one. One of the first things that you need to calculate is the kids’ education. Education rates rise each year for good colleges. Use estimates to determine the cost of college for the year that your children will turn 18, and then be sure to leave a life insurance policy sizable enough to put your children through four years of college. This will help your children go through school without having to take on debt.
The death of a spouse is a difficult thing to go through. There is a lifestyle adjustment that comes with this, both emotional and financial. Be sure to leave a spouse enough money to pay off the debt and care for themselves after you have passed. The amount will depend on the lifestyle that you live and the amount of money that you and your spouse have saved. Come up with a plan on what will happen after one of you is no longer there in order to decide on the amount of life insurance coverage that you should leave for your spouse to live on.