A Checklist: Expenses Your Life Insurance Should Cover
It can be easy to underestimate how much life insurance you will need, especially if you only consider your final, burial expenses. Life insurance provides the opportunity to not just clear the slate of your debts, but to provide for others after your death. Here is a checklist of items you may want your life insurance to cover.
- Final expenses. This should include final services, casket, cremation and other costs associated with a funeral and burial.
- Medical expenses. Frequently, when death is due to illness, large medical bills can be left behind. This can be difficult to estimate but should be considered.
- Credit card debt. Even young people can have significant credit card debt if they would prematurely die. Your estate will be held responsible for these debts.
- Car and other loans. This is critical, especially if family that is left behind depends on the car for daily transportation. Be sure to include any other loans like department store or home improvement loans.
- Student loan debt. Student loan debt can follow young people for years and even decades. It is important to account for these after death, particularly if they were co-signed by a parent or guardian.
- Mortgage. If you have a family, you will want to ensure they can stay in the house you live in. Accommodating a mortgage payoff can help accomplish this.
- Future college expenses. If you have children, you may want to consider having adequate funds to pay for their college education. Be sure to include inflation in your estimate of future college costs.
- At least a year’s income. Your death will likely have devastating effects on your family. You can minimize the damage by accounting for at least a year’s worth of living expenses for them.
- A future legacy. Life insurance allows an opportunity to leave a financial legacy to a favored non-profit or charitable organization.
When you account for all the above, it is easy to realize how much life insurance you should really have. Acquiring life insurance when you are young and healthy is more affordable than most believe and our independent insurance agents can help. They have access to a multitude of life insurance companies who may help you achieve your goals at an affordable price. Contact us today to get started building a life insurance program you and your family deserves.