Tips for Calculating Your Life Insurance Needs
February 28, 2022
February 28, 2022: Buying a life insurance policy is a great investment in your future, but in order to optimize your investment, you should consider how it plays into your retirement strategy. Many people choose a policy years before they plan to retire and fail to consider whether their life insurance needs may change. Indeed, this is a common source of unexpected expenses, so it’s important to integrate your life insurance plan into your retirement strategy. How exactly can you anticipate your future insurance needs, though, and which is the best method to calculate the insurance needs you may have in retirement?
Consider Who You Want to Protect
One of the most common reasons for updating a life insurance policy is an expansion of the family. If your life insurance currently lists only one or two beneficiaries, but as grandchildren enter the picture, you may wish to add them as beneficiaries on your policy. Some people also wish to add siblings and other relatives. Making these updates is a great way to ensure that all of your loved ones are included.
Estimate Length of Financial Support
If you’ve chosen to add new beneficiaries to your life insurance policy, you should consider the length of time you want your coverage to extend support for. Maybe a set sum to be issued for the payment of college tuition. You should carefully consider how much — you want to provide for with your policy.
Deduct Any Debts That May Remain
It’s important to note that a life insurance policy should be adjusted based on your debt, too. If you have a mortgage, credit card balance, or car payments, these debts may be held against your estate in probate. If your life insurance policy is sufficient to pay off such debts, though, you may minimize the chances of messy probate proceedings. You should invest in enough coverage that the debts can be paid outright by a policy beneficiary.
Factor In Savings and Retirement
What are the three steps to estimate life insurance needs? Identifying how much life insurance you need is a tricky question, but you should be sure not to forget your savings and retirement plans. How easily can your assets be liquidated? How much do you have in cash savings? These questions may help you estimate a realistic figure for life insurance coverage even if you do not have ample assets. You may even be able to compensate by investing in a full life policy that allows for a growing cash value.
About 1891 Financial Life
At 1891 Financial Life we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.