Most people understand the importance of life insurance. Not only does it help pay for your funeral and other final expenses, but it also can help take care of any loose ends that you may leave behind, such as credit card bills and other financial issues. It can also help take care of any financial dependents that you leave behind. But how much should you get, and how much is it going to cost? In this article, you'll learn the answer to both those questions.
To determine how much insurance you'll need, you need to figure out a couple of things first. If you have a spouse or family that is financially dependent on you, you'll need to basically replace your income. So take the amount that you make per year, and guess how many years your family will have to survive without you. A good place to start is about twenty years. Then add in some for inflation. A good way to do this is to add about fifty percent over twenty years.
Now you'll need to determine the cost. If you are going to buy term life, it's going to be much cheaper than whole life. Whole life is insurance along with some kind of investments. Term life is pure insurance. With whole life, you build up cash value, and can have access to that money later on if you need it. If you are only worried about taking care of the people you leave behind, then term life is probably a better option.
An additional consideration when calculating your cost is your age, and your health. The older you get, the more you are going to have to pay. If you have any health issues, the price may increase as well. Similarly, if you smoke or drink regularly, you'll likely have to pay more for your insurance. Basically, the younger and healthier you are, the cheaper it's going to be.
So now you've some basic understanding of life insurance. You know about how much you're going to need, and you have a basic idea of what it's going to cost. The best thing to do now would be to do some shopping around. There are plenty of places online that will give you free quotes, as well as numerous agents in the yellow pages that would be more than happy to help you. Just keep in mind that the longer you wait, the more expensive it is going to be.