How much life insurance do you need?
Experts generally recommend the 10x rule. This simply means you multiply your annual salary by 10 to determine how much life insurance you need. So, if you make $60,000, for example, $600,000 would be your base life insurance amount.
The final insurance sum will depend on your unique circumstances and how you’d like to protect your family.
From covering your kids’ school and college fees to mortgage payments to wiping out debt or even replacing your yearly income, there are several options you can choose from to support your family.
What options are out there?
Here are three popular options.
Term Life Insurance
Term insurance is a type of life insurance that offers coverage for a predetermined period, known as the "term," that typically ranges from 10 to 30 years. If the insured individual dies during this term, the policy pays a death benefit to the designated beneficiaries. Term insurance is usually a less expensive and more flexible option.
Young families and busy professionals looking for fast and affordable insurance can easily connect with Ethos and get term life insurance in 5 minutes, with no medical exams or blood tests.
With Ethos Insurance, you get a policy with up to $2 million in coverage, starting at just $2/day. Ethos’ application process ensures you get flexible coverage options quickly and transparently, allowing you to focus on what matters most.
Whole life insurance
On the other hand, whole life insurance is a form of permanent life insurance that offers lifelong coverage and a death benefit. It also has a cash value accumulation, with a portion of the premiums going into a savings component you can draw on if needed.
Life Insurance Savings offers a variety of straightforward policies designed to give you peace of mind and solid options to choose from.
Their Simplified Issue Whole Life Insurance provides coverage between $2,000 and $40,000 for ages 45 to 85, with no medical exam — just a few simple health questions. While their Guaranteed Issue Whole Life Insurance guarantees acceptance without medical exams. It offers coverage up to $25,000, and premiums are fixed for life.
Life Insurance Savings offers a seamless way to secure the lasting protection you need. With their straightforward approach to whole life insurance, you can focus on your family’s future.
Long-term care insurance
Long-term care insurance offers coverage for the costs of in-home assistance, nursing homes or assisted living facilities.
Without proper planning, paying for long-term care could deplete your retirement fund. Family members often bear the burden of paying for care, potentially straining their finances.
When considering long-term care insurance, GoldenCare offers different options based on your needs, including hybrid life or annuity with long-term care benefits, short-term care, extended care, home health care, assisted living, and traditional long-term care insurance.
You can combine your term life insurance policy with a long-term care insurance policy to give you and your family peace of mind.
What affects the cost of your life insurance?
When it comes to life insurance, understanding the factors that affect premium costs is important. Here are the top 6:
- Age: Generally, the younger you are when buying a policy, the lower your premiums will be. Premiums tend to rise as you age.
- Health history: Your current health and medical history – including pre-existing conditions, medications, and family medical history – significantly influence rates.
- Lifestyle habits: If you’re a smoker, you can expect to pay higher premiums because of the increased risk of conditions like heart disease and lung cancer. Heavy alcohol consumption and high-risk hobbies (like skydiving or racing) can also increase premiums.
- Coverage amount: The greater the death benefit (payout amount) you choose, the higher your premiums will be.
- Policy type: Term life insurance typically costs less than permanent life insurance since it only provides coverage for a specific period.
- Gender: Women generally pay lower premiums than men because they statistically live longer.
Choose from a broad range of coverage
If you’d like to be insured for more than 10 to 30 years or simply want broader coverage, you can check your options through a free online marketplace such as BestMoney.
BestMoney connects families with insurance companies and certified independent agents and brokers – giving you a broad range of term life insurance options from which you can choose.
With coverage starting as low as $7/month and variable terms, you can quickly evaluate your options and choose a policy that will relieve your family of the financial burden of an untimely death.
