As you begin developing a financial plan for your family, it is important to consider purchasing individual life insurance plans. Oftentimes, families are prompted by a life event to begin the process of shopping for life insurance. For families with young children and a stay at home spouse, insurance is more important than ever.
How Much Coverage Do I Need?
So where do you begin? The first step is figuring out how much coverage you need to purchase. For a working spouse, it is recommended that you purchase coverage to replace 4-10 years of annual income, plus outstanding debts. This decision is influenced by the age of children, and how many spouses are breadwinners. It is also important to consider insuring stay at home spouses. Although they may not have an income, the expense of childcare, cleaning and cooking can cost over $100,000 annually as well.
How Long Will I Need It For?
Once you have calculated the amount of coverage you are looking for, you must make a decision between term or permanent insurance. More often than not, families will choose term insurance. This means that you pay a fixed amount for a term (typically 15-20 years). This is popular among parents with young children who are looking to ensure financial stability until their children are old no longer dependent. Permanent insurance is viewed as more of an investment and estate planning technique. Unlike term insurance, permanent insurance doesn’t have a set end date and is typically more expensive. This may be a more useful option for families with a handicapped child who will need assistance for life.
What if you don’t have a family? Young, healthy, single individuals can save money by purchasing term plans before they begin their families.
Who do I Purchase it From?
The next step is finding a reputable agent or business. Because these are long-term plans, you want to find a business that will certainly be around for a while. Online reviews and research are helpful during this step. Feel free to shop around and collect various quotes before you make a decision. It is always important to check a company’s financial soundness before investing.Although life insurance is an uncomfortable topic to think about, it could make all the difference for your family.
Stephanie Wilmsmeyer is a State Farm insurance agent in Columbia, Mo, specializing in life insurance. For more info on how Stephanie Wilmsmeyer’s life insurance expertise can help you find the right policy for you, follow her on Google+.
