Millions of Americans do not have life insurance. And while of course, determining your need for life insurance depends on your personal situation, it is important to take the time to determine if life insurance is a good fit for you and your loved ones.
#1 Determine your life insurance need
Get an understanding of your final expenses. This could range from
- Leaving money for a spouse or dependents
- Funding education for minor children
- Funeral expenses
- Unpaid debts, mortgages
- Business succession
#2 Understand the different types of policies
There are many different types of life insurance policies available. But generally, having an understanding of a term policy and whole life policy is key. A term policy is for a specified time and quite often less expensive than a whole life (permanent) policy. A whole life policy is a permanent policy. It is for individuals who desire coverage the day of death. This, of course, could be more expensive.
#3 Assess your current policies
Take time out to review your policies. Get an understanding of the different terms. Frequently check your current beneficiaries and the lingo within your policy. If you don’t understand something, inquire about it now. Also, if you have coverage at work, you may want to consider purchasing another life insurance policy. This is essential if you know that you will not work there for a long time. Keep in mind, purchasing at a younger age can reduce the cost.
Need help determining your life insurance coverage? Contact Washington CPA Services, LLC.
Kemberley Washington is a certified public accountant and owner of Washington CPA Services, LLC. Check out her blog at kemberley.com.