Before selecting a life insurance policy, consider your income and the ongoing cost of living. It’s recommended that you obtain benefits equal to five to eight times your current salary. Other factors, such as your age, the number of dependents you have, and your financial goals (like retirement) will help you decide on a policy that’s right for you. A Martin Insurance Team agent serving the Evergreen Park, IL area can advise you about the different types of coverage available.
Calculate Income and Expenses
First, calculate the amount of income you will need to pay for annual expenses (mortgage, utilities, food, clothing). Next, add the sources of income that would be available to your family upon your passing, such as your spouse’s earnings, pensions, and Social Security. Subtract the total annual income from the annual amount of income you need (Step 1 minus Step 2). Multiply the result by the number of years you want to provide coverage for your dependents. Add to that figure the full amounts of any lump-sum expenses that your family would be responsible for, such as funeral costs, medical bills, or student loans. The final number gives you the amount of coverage you need.
Other factors, such as marital status and the ages of your children, may affect how much insurance you purchase. Single parents with young children may opt for a higher level of coverage, especially if they are the family’s sole breadwinner. If you’re married and your children are grown and able to support themselves, you may want a plan that provides only for your surviving spouse.
If you live in Evergreen Park, IL, and have questions about life insurance, a Martin Insurance Team agent can help you explore your options.