Here’s the bottom line:
1. Whatever you buy it will probably be the wrong amount. Why?
If you buy what you need today – but you don’t die for 30 years – with inflation and all – you’ll probably have far too little. Remember what a Popsicle used to cost when you were a kid?
But, if you plan way ahead and buy what you might need in 30 years – but die tonight – well then you’ll probably have way more than you need. The upshot is that if you’re going to be wrong anyway – Do you want to be wrong so the family benefits or is grossly disadvantaged? You can decide what’s right for you. This is an “art”, not a “science”.
2. Despite all the fancy “financial planning” calculations you can do today, you’d be amazed how often total life insurance “needs” fluctuate between 7 and 10 times your gross annual income. So, pick a number and do the math. 10 is easy and round down. (See number 1 for more details.)
3. Whatever amount you choose, know that the maximum any insurance company will give you runs between about 15 and 25 times your gross annual income depending on your age, other factors and all other things being equal. There’s a lot to this but generally the older you are the less you can buy. We can tell you more over the phone if you care.
4. Be aware that the “cheap term insurance” you’ve got from work, your university, bank mortgage insurance (Yes, that’s term life insurance too), “TV Plan”, professional association and the motor league is probably costing you a ton more than it has to. We can show you the differences if you’re interested. Just call 905.787.9924. Think about adding what you have to this total to compare the prices. You might be very surprised.
Ultimately, it’s your choice. The truth is no one “Needs” any life insurance at all. With the social safety nets we have in this country, no one has to live under a bridge in a cardboard box. It all depends on what you “WANT”. If you “want” life to go on as you had in mind, you buy some. If it’s not that important – you don’t. It’s all up to you.
Oh yeah, one more thing.
You don’t have to be “dead” not to be able to buy life insurance today. With the sophisticated underwriting companies do today – maybe you’ve even heard about the possible use one day of genetic testing – sometimes you can’t buy any regardless of what you want to pay. So, if you are in good health, it makes a lot of sense to many folks to protect themselves and buy all they can of the cheapest coverage they can get. It is “insurance” after all.
This is also a good time to tell you that there are many possible rates for your term insurance based on your “Health and Lifestyle” status (Smoking, recreational drugs, extreme sports…) Prices for apparently similar people can vary widely. It all depends on you. This is why you likely still need a little help with this process. Hope this helps. …
