Once you know that you need a life insurance policy, finding one that fits your needs can seem like a daunting task. The options appear endless – you need to choose whether you want a whole or term life insurance policy, then you need to settle on how much coverage your life insurance policy needs to offer.
Here at Vargas and Vargas Insurance, we are dedicated to helping our customers work through these types of decisions. For example, when you are looking to estimate the amount of coverage your life insurance policy will need to have, you should consider the following factors:
End of Life Expenses
If you pass on, you need to ensure that the burden of your final medical expenses and funeral expenses does not fall on your family. This is done by ensuring that these expenses are covered as a part of your life insurance policy.
Double check your health insurance policy, and make sure that all of your final medical expenses will be covered. If there are any holes or gaps in your coverage, you can use your life insurance policy to fill them in.
Also, it is easy to overlook how costly a funeral can be. Remember that your family will most likely need to cover a bunch of different expenses, including purchasing a gravesite, a casket and burial expenses or cremation expenses. They will also need to cover the cost of a funeral home, and an accompanying service.
Remaining Obligations
A life insurance policy needs to be able to cover your remaining financial obligations. These obligations can range greatly, but typically include mortgages, car loans, student loans, and the like.
This is, of course, assuming that these obligations are not covered by another type of insurance. For example, a car loan is sometimes covered as a part of your car insurance. If you are unsure of your loan coverage, just ask your insurance agent to review your policies.
Anticipated Expenses
If you have children under the age of 18 at home, you may wish to include some money for them in your life insurance policy. As an added benefit, this money can sometimes be earmarked. This will ensure that the inheritance is only spent in the way you intend, typically for college tuition or other educational expenses.
Future Needs
In addition to covering these three specific things, you need to make sure that your life insurance policy covers the rest of your loved one’s needs. This is best quantified by looking at your household’s current expenses. Add up all of the little things that your family spends money on – like groceries and entertainment.
When you are calculating these additional expenses, remember to do your best to account for a changing cost of living due to inflation!
If you need help estimating these figures, remember that a life insurance expert is only a phone call away! With a quick and easy call to Vargas and Vargas Insurance at 877-550-0025, you can speak to an insurance representative that will walk you through the steps of determining what level of life insurance you need to make sure that you and your family are protected in case of the unthinkable. So don’t wait – call now!
