As your Plymouth insurance agent, EnviZion Insurance strives to help our community by providing sound insurance advice to protect your finances. Today we are going to give some insight on how to figure out how much life insurance a person needs. When it comes to how much life insurance you need it kind of goes back to that basic factor of taking account of all your finances. You need to add up how much you make. You need to add up how much debt you have. You have to add up as far as your budget is concerned, how much you spend every month. You need to take into account how much you have in your retirement. You need to take into account if you need any extra funds, such as if you have kids and you have college funds that you would like to provide and that sort of thing. So overall, what you’re really going to look for when you’re trying to do to find a number for your life insurance is a cost analysis, because you want to know how much you’re spending every, every single, um, month on all of those items so that you can properly prepare whoever is relying on your, your income for no longer having the availability of that income. As the Plymouth insurance agent we help clients fine life insurance by asking the right questions like the ones above.
So just for example, if you have a home that has a mortgage with $200,000 left, you have $20,000 of other debt, you have no retirement yet, and you have two auto loans that are another $20,000 combined. So you have $240,000 in debt between the credit cards, the autos and your mortgage. In addition, you have not saved for retirement yet. In this example, you are the breadwinner of your home and you have one child. So if you were to pass away as the breadwinner, your spouse is not going to be able to work so she’s not going to have any income whatsoever. So you’re going to need to pay off all debt, which is the $240,000. You’ll probably want to set her up with a nice chunk of money for retirement since there is nothing there yet, which you figure out based on your actual spending per month and the number of years needed. It could be anywhere between $200,000 and $1 million depending on how young you are and how long you expect your spouse to live. In addition, if you have those kids, do you want to set up a separate amount of money so that you can pay for their college? So if your child is 10 years old, now you’re going to say, you know what, college may double in price, so you might need it another hundred thousand dollars per child just for college funds.
And then the other major expense is monthly spending that you’ll need to provide to your spouse and your children. This is for things such as clothing, utilities, food, and all those necessities that you pay for every month to live a normal and healthy life. So overall, that may add up to being, you know, close to $1 million or $1.5 million by the time you go through all of those factors. Again, it’s hard to think of all these things when you’re not an insurance agent like myself because it’s just not in your normal realm of thinking. That is why working with your Plymouth insurance agent at EnviZion Insurance can be beneficial when it is time to get life insurance. We help people, like yourself, understand fully what life insurance covers and how it can protect you financially.
Life Insurance is by far one of the best ways to protect, protect your finances overall, and there’s not a one size fits all number for all people. Everybody has their own amount of debt that’s unique. They have their own, you know, way of living. They may live in more extravagant lifestyle than another. Some people have kids, some people don’t. Some people have two incomes and some people only have one. So it’s important to understand that you really need to take an account of your own finances before making any decisions when it comes to life insurance. It can seem like an overwhelming task but with the help of your Plymouth insurance agent you will find the process is easy and simple because of our process and experience.
One of the best ways to make sure you have all the right questions answered, and account for all of your expenses is to sit down with a Plymouth insurance agent at EnviZion Insurance. Many people do not realize how much of a financial protection life insurance can be. Especially younger people who think they are in great health when they think they do not need it yet. Many other people assume life insurance is expensive when in fact it usually costs you less than their morning Starbucks habit each day. The fact of the matter is that life insurance is for almost everyone, and waiting until it is too late can be a costly financial mistake.
The last factor we always like to bring up is the importance of purchasing life insurance as early in life as possible, and here is why. As you age the price of your life insurance will increase, after age 55 the price of life insurance can almost double in most cases. Also, the price from age 20 to 30 can be major so the longer you wait the longer you pay. Your Plymouth insurance agent is always trying to find ways to help people with their insurance needs, and life insurance is one of our strongest financial protection products. If you or someone you know does not have life insurance, it is in your best interest to sit down with us at EnviZion Insurance and see if you do in fact need life insurance. We are passionate about life insurance because we understand the power it has to protect you and your family from financial hardship, and we care about the people in our community.