How Much Life Insurance Do I Need? Life Insurance gets your loved ones going when you have gone and then they will rule the world they have around them with the choices they make. In other words, life insurance is already ruling the world by giving financial cover and assurance to millions.
The world may be complex, but life insurance keeps it all so simple for your loved ones. Once you have said sayonara to the world then it’s time for your near and dear ones to adjust to a new life without you around.
How they adjust to this massive change in their world more often than not may be dictated by an outsider. This outsider is the insurance company that releases the payout to you if you are the beneficiary of the loved one who passed away.
Your world may have crumbled at the demise of your loved one, but having life insurance cover helps in getting the building of your life up and running again.
How Much Life Insurance Do I Need?
In order to come to a suggested amount to buy, you need to consider your circumstances and your budget.
Moreover, you need to ask yourself some important questions and then jot down the answers in a notebook.
1- What would be the annual income that your dependants would need?
2- For how long would your dependents need some kind of financial support?
3- If you have debt, then how much debt would you need to pay off?
4- There will be funeral expenses. So how much amount would you like to add for funeral expenses?
5- If you have savings, then how much is it?
6- You may have some life insurance. What is the total coverage amount?
Once you have the answers to these important questions, you may have a revelation. These answers may reveal that the world around your loved ones is not all hunky-dory. It is here that you will come to realize that getting the right life insurance cover will result in a less painful world for those who you will leave behind.
Your honest answers to the above questions could result in a nagging thought that maybe, just maybe, you need life insurance with good cover.
Take Out Your Calculator
You may think that powerful people rule the world. You may even smile and think that you are so insignificant that you cannot even use the word ‘rule’ in a sentence with conviction. But here’s a thought.
Not powerful people, but powerful people with money backup rule over others.
Money attracts power, but power doesn’t just come from money. It comes from a sense of confidence in what you are, how you contribute to society, and how society perceives you.
Life insurance is one important factor that gives you a chance to rule over that part of the world where you have influence. That influence is most on your family. Providing for those loved members of your family even when you are gone is the power that life insurance gives to you.
So, time to take out your calculator, your thinking hat, and your notebook.
1- How much is your take-home pay? If you have a salary and/or partner who too earns, then jot down the total amount you are getting every month. Then multiply this amount by 12. This tells you the amount of money your dependants could need every year.
2- How long would your loved ones need good financial support? The answer to this will help you decide the ‘term’ or duration of your life insurance policy.
3- How much debt do you have? Think clearly because the biggest superpower of life insurance is its ability to clear any debts or mortgage that you may have accumulated. Your insurance policy can take care of this debt for your family after your demise.
4-What about your funeral expenses? Having a funeral can be expensive. Even though it sounds unpleasant, but adding this funeral expense to your total calculation will be helpful.
5-How about all those savings and investments?
The amount of savings and investments that you have made as part of your financial portfolio can be used to fund the world of your loved ones. This could let you go for a smaller financial cover.
6- Do you have any current life insurance?
You may have some life insurance policy already. So you can take the cover you are getting from it into the final calculation of how much more you may need to buy.
So, coming back to the grand original question: Will life insurance ever rule the world? The almost right answer could be: Life insurance can rule your world if you let it.
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