September is National Life Insurance Awareness Month

September is not only the beginning of fall and the kickoff for football season; it is also National Life Insurance Awareness Month. Why do we need an entire month focused on raising awareness about an insurance product that is not even required? Because many people who should have life insurance are not aware of how affordable it can be and fail to purchase any coverage at all.

Who Needs Life Insurance?

The short answer to the above question is anyone that has others depending on them in any way should have life insurance. The amount of coverage you need varies in proportion to how much others depend on you. Everyone should at least have enough insurance to bury them. Beyond that, the calculations for how much you need become more complicated.

Here are some questions to ask to get you started:

  • Are you the primary breadwinner in your house?
  • How many dependents do you have?
  • How long will it be before your dependents are out of high school and how much would it take to maintain their standard of living until each one turns 18?
  • How much will your dependents need to fund their college education?
  • How much would be required to eliminate all your debts including your auto and home loans?
  • Do you have a business? If so, how much would be needed to ensure that it survives and operates smoothly without you?

Once you have answered these questions and added up the figures, you have a pretty good guestimate of how much life insurance coverage you should have.

Finding the Right Life Insurance Policy

Now that you know how much you are looking for, you will need to decide what type of policy is best for you. There are two general forms of life insurance; term and whole (permanent). Term life insurance is cheaper, but the policy does not accumulate cash value and the “term” eventually expires, meaning there will come a time when the coverage is no longer in force. Whole life insurance is permanent as long as the policy is fully paid for. The policy is also a financial asset that can be redeemed for cash value or borrowed against.

The best way to proceed in finding the right policy is to determine what amount of coverage you want and what you can afford, then shop around for an insurer that can meet those needs. You can save a lot of shopping time by speaking with an independent insurance broker with access to multiple major carriers. Because independent agents have no allegiance to any particular insurer, they are free to shop around for you and find the coverage that best fits your circumstances.