Life happens.
You get rear-ended on your way to work. Hey, good thing you had car insurance.
A huge hailstorm rips through your neighborhood destroying your roof. Nice! You had homeowner’s insurance!
You slip and fall and can’t work for a few months. Thank goodness you had disability insurance.
You like the way icicles look from directly underneath when it snaps off the roof and impales your brain…
Do You Need Life Insurance?
It’s true that not everyone needs life insurance. But if you have someone who relies on you for income, you likely need it.
Like the other types of insurance mentioned above, life insurance is a tool we use to handle a specific need. In this case, it’s keeping loved ones from feeling the financial impact of your absence.
The Needs Guide
In case you’re still wondering if this applies to you, here are a few common situations that I see and whether they needed life insurance or not.
Of course, this list isn’t all-encompassing. Every person’s situation is different and needs to be
However, you may notice a common theme. In each of the situations where life insurance was needed, it was because someone was relying on another person financially.
How Much Do I Need?
Okay. So you’ve determined you need life insurance. What’s next?
The next step will be to calculate how much you need. There are a few online calculators that can get you started.
If you think your need is immediate, I recommend contacting a fee-only financial advisor before going to see your insurance agent.
The bigger the policy, the more commission the insurance agents get paid. They have an incentive to sell you more insurance then you need. Fee-only advisors only get paid by you and will be able to give you an unbiased calculation that you can take to your insurance agent.