life insurance and debt Archives

Can You Have Too Much Life Insurance Coverage?

Is there such a thing as too much life insurance? If you’re shopping for life insurance, one of the questions you might be asking yourself is, “How much life insurance do I need?” Well, the answer is that your coverage should meet your specific needs. But more is not necessarily better, since the higher the coverage amount you purchase, the higher your premiums will be. To choose the appropriate amount of life insurance coverage for you and your family, there has to be a balance between how much you want to spend and how much coverage you want. But if you’re thinking that your policy has more coverage than you need, you do have the option of reducing your coverage, which will allow you to also save on premiums.

How Much Life Insurance Do You Need?

When trying to decide on the amount of coverage that you need for your life insurance policy, remember that it depends on your specific situation. The amount of coverage you need will depend on your plans and goals for your future and the future of your family, and on how much money they need now and will need in the future.

How To Determine How Much You Need

To be more specific, to determine how much life insurance coverage you need, you’ll have to take into consideration two major factors:

Income replacement – Decide how many years of income you would like to replace for your family, then take that number and multiply it by your annual income.
What will need to be paid off – Add up all the debt that you currently have, including mortgages, credit card debt, bank loans, and any other debt. Once you’ve calculated that amount, add it to the income replacement amount.

Finally, to make sure you aren’t overpaying for a policy that is bigger than you need, subtract the current value of your estate from those two numbers. This will help you get a more accurate idea of how much your family will need in the event of your passing.

To give you a good baseline, many life insurance experts generally recommend that you multiply your annual salary by 10 and choose a policy of that size. That way you know that your family will be taken care of for at least a few years, and will have a replacement for your income to cover their debts and expenses.

magnifying glass with an eye in it — *The best way to find a great plan is by comparing plans from different life insurance companies.*

Finding The Right Type of Life Insurance

Your family has financial obligations that will not go away when you are gone; they will need your help more than ever with their expenses, and the last thing you want them to worry about is money while they are grieving. There are many great affordable life insurance options to choose from that will provide enough money for your family, for a low monthly price. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

How Does Debt Impact Life Insurance?

If you have debt, then you know how stressful it can be – and debt is a big issue for many people in the U.S. In fact, the average personal debt for an American is a whopping $90,000! And if you are one of the many people saddled with all of this debt, you probably also stress about leaving your debt behind for your family to deal with when you pass away, or about not being able to leave them anything when you’re gone. The solution? Life insurance can help you pay off your debts AND allow you to provide your family with money when you are gone. But the big question is: can you even buy a life insurance policy when you are in debt, given that life insurance companies look at your finances when you apply for coverage?

Can You Buy A Policy if You’re in Debt?

If you are plagued with debt then you might be worried that you won’t be able to purchase a life insurance policy, but the opposite is actually true. Life insurance companies will approve anyone trying to buy a plan even if they are in debt: after all, you need a policy just as much as other people. In fact, you might have even more reason to buy a life insurance plan, so you can help your family pay off your debt and then some when you are gone.

And fortunately, life insurance premiums are normally inexpensive monthly payments: they can be as low as $30 a month for a healthy 30-year-old. Because policies are so affordable, it’s better to buy now rather than later, since you could end up paying more in life insurance premiums as you age. That’s because the older you get, the more you will pay in premiums for your policy, so it is better to find a plan now that will offer your family financial security at a low rate.

Will Debtors Take Money From Your Policy?

Now you know that it’s possible to buy a policy even if you’re in debt, but will the money go right to your family, or will your debtors come knocking at your door after your passing and claim your death benefits? Fortunately, life insurance is not like other assets: your home, cars, personal belongings, and bank accounts all go into an estate when you pass, which can be used to pay off your debts before the remainder of the money goes to your loved ones. But with life insurance, your beneficiaries will receive the death benefit payout directly and will then be able to spend it however they choose.

Looking For An Affordable Plan?

illustration of an investigator with a magnifying glass looking at a red question mark — *You can still find a great and affordable plan by comparing plans from different companies.*

Your family has financial obligations that will not go away when you are gone: they will need your help more than ever with their expenses, and the last thing you want them to worry about while they are grieving is money. The best way to find an affordable life insurance plan, even if you are in debt, is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.