You have car insurance to cover you if an accident occurs. You have homeowners or renters insurance in case something happens to your residence. But if you’re like many people, you may not be fully protecting one incredibly valuable asset: you. Or rather, the income you provide to keep your household running.
There’s a simple step you can take to protect your loved ones from the sudden loss of your income. By owning a sufficient amount of life insurance, you can help make sure your loved ones can cover not only funeral costs, but also outstanding debts, living expenses and even a home mortgage.
If you’re concerned that you don’t have enough coverage or the right type, here are six questions to ask yourself.
1. What role does life insurance play in my current situation?
No matter where you are in life, the right amount of life insurance can play a key role in your financial future and help your loved ones be more financially secure. Keep in mind your needs for protection change throughout your life. Here are a few examples:
- Recent college graduate: If something unexpected were to happen to you, your student loan debt might become your parents’ responsibility.
- Spouse or significant other: If you live with another adult, the two of you likely share the cost of the monthly living expenses. Life insurance can help pay those expenses and continue the same standard of living.
- Homeowner: The largest expense for most homeowners is their monthly mortgage. Life insurance can help provide money your loved ones can use to continue making those payments.
- Parent: A life insurance payout could help pay your children’s college expenses or provide much-needed financial support to your partner to help raise your children.
- Caregiver: If someone else, such as an aging parent or a special needs child, is relying on you to provide care or financial support, proceeds from your life insurance can help ensure that their care and support will continue.
- Charitable supporter: Life insurance proceeds can help you leave money to
an organization that is important to you, helping it continue its mission well into the future.