Making Your Way through Life's Transitions: When, Why and How Much Life Insurance You Need
(ARA) – Having a baby and purchasing a house are two of the most significant, life-changing events any of us ever go through. These two circumstances are the top two reasons most people buy life insurance.
With a new baby you now have another person who will become dependent on you and your income for the next eighteen to twenty-two years.. The proceeds from a life insurance policy can replace the income lost to your family in the event of your death, leaving your family in the same economic situation as when you were alive. The life insurance proceeds can pay a future college tuition or allow for your child to play travel soccer, enjoy music lessons, or a private education. That same policy can also pay off debts like a new – or bigger – mortgage.
“One of the unfortunate facts of life we are constantly reminded of in the life insurance business is how death can come to any of us at any time,” points out Will Jerro, President of ReliaQuote. “Life is so fragile and we don't all die after living comfortably for 88 years. Death can choose anyone and we need to think of the financial well-being of those we would leave behind.”
If you have recently gone through a life transition such as having a new baby or taking on a mortgage, now would be a good time to choose some life insurance, or more life insurance, ReliaQuote has a life insurance needs calculator on their Web site. The needs calculator is a simple tool that can help you figure out how much life insurance you need to buy, based on your own assumptions and personal data.
The needs calculator helps to answer the basic question: If you died tomorrow, how much money would your family need to cover expenses like funeral costs, estate administration, the house you may have just bought, or a college education for that new baby. The calculator also allows you to place variables into the equation, such as the inflation rate and the amount of return that you think you could find in today's stock market. However if you find that the number of life insurance required to totally replace your income is astronomical, remember that to solve a problem like how much life insurance one you purchase is just a matter of budget, personal comfort, and the current cost of a policy. The best way to get to the bottom of the actual cost is to speak to a life insurance agent. In most conversations concerning actual costs the agent will ask health questions, date of birth and activities such as travel and driving record. With this information it is relatively simple to calculate a rate. For most life insurance agents this is a no obligation discussion.
In today's economy it often takes two income earners to buy a house, or move up to a bigger, more expensive home, life insurance on both wage earners becomes more important.
Husbands and wives are economic partners today, with more than 60 percent of married women bringing home a paycheck. Yet the American Council of Life Insurance estimates the average death benefit on men is nearly double that for women.
In the situation where a spouse works at home there is still as much a partnership as the two-income family because it takes both spouses to make the household function. The services of the homebound spouse may be in many respects “beyond value,” but they are definitely worth tens of thousands of actual dollars a year.
It is perhaps a bit of a cruel irony that the times in our lives when we need life insurance the most, the possibility of the death of a breadwinner being the financial ruin of a family is also the exact same time we are the busiest and the most stressed.
That's why it makes sense to take some of the hassle and work out of the process by using an online life insurance broker like ReliaQuote. The instant quote engine gives you rates from hundreds of insurance plans quickly and conveniently from the comfort and privacy of your home or office.
“Life insurance is about peace of mind,” states ReliaQuote's Will Jerro succinctly. “You don't want to be in the hospital bed thinking about your family and saying to yourself ‘I should have bought more life insurance.'”
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