As your life changes, consider what you’ll need to protect your family.
As your life changes, so will your needs. You could buy a home, get married, and even have children, which is a far cry from living the single life. As your life changes, you may want to consider what you’ll need to protect your family, should you pass away. It might sound morbid, but death is a fact of life. That’s why buying life insurance is an important part of smart planning and protection. “But, Wyshbox,” we hear you say, “how much life insurance do I need?” Don’t worry, we’re here to help you out.
The Wyshbox Blog
- What does term life insurance cover?
- Term life insurance coverage
- How much life insurance do I need? A summary
What does term life insurance cover?
So here’s the scoop. Life insurance is a contract between you and an insurance company. This contract guarantees a death benefit, or a lump sum of money to your beneficiaries when you die. The cost of your premium, or the amount you pay per month, depends on things like your gender, age, and health (among other factors).
A relatively low charge can cover thousands of dollars worth of debt. Anything from student loans to mortgages can be paid. Your beneficiaries could also tackle credit card debt, in case you die before paying off those bills.
Often, life insurance coverage is used to cover funeral expenses. That’s because funerals can get extremely expensive. According to the National Funeral Directors Association, the average funeral cost $7,848 in 2021. Grieving a loved one can be difficult. Your life insurance coverage could mean that your family may have less worries to consider, should something happen to you.
Term life insurance coverage
When it comes to term life insurance coverage, you may want to make sure the amount can cover things like your bills and any outstanding debts. Some experts suggest multiplying your salary by five-seven times or even ten times. Others offer a term life insurance calculator that can help you figure out coverage. But let’s say you want a method that takes your actual needs into account. That’s where the DIME method comes in.
DIME stands for Debt, Income, Mortgage, and Education. You add up your amount of debt, your income, mortgage or housing costs, and any future educational expenses for yourself, your partner, or your kids. Totalling all of these can give you a ballpark figure for term life insurance coverage.
At Wyshbox, we’ve updated the old term life insurance calculator. Our Wysh Builder tool allows you to figure out your needs by focus. Add up the exact needs or “wyshes” you have for your loved ones and build the policy that best reflects your situation. If your needs change, as life often does, you can adjust your coverage amount later. Also: it’s not always better to just max out your coverage. Stick to your needs. That way, you can keep your premiums manageable and within reach.
How much life insurance do I need? A summary
When it comes to life insurance coverage, it’s important to do your research and, if you don’t know something, ask questions. That’s why you’re here. We’ve got a more in-depth guide to calculating the right amount of coverage, so check that out next! If you have more questions about term life insurance coverage, explore our Wyshbox resources. Don’t forget to share them with your friends!