Whether you are 25 or 55, a life insurance plan is vital for your family’s financial future. To quote Albert Camus, “Real generosity towards the future lies in giving all to the present.” Making sure that your family is taken care of in case something happens is essential.
According to a study conducted in 2018 by Life Happens and LIMRA, “44% of millennials overestimate the cost of life insurance by five times the actual amount.” If that is true, no wonder younger families believe that they cannot find affordable life insurance plans.
The Average Cost of a Funeral
According to research done by smartasset.com, the average cost of a funeral is $7,181, and that expense covers everything from viewing and burial service fees and more. Of course, cremation is another option instead of burial, but the cost difference is only $1,103 cheaper according to the National Funeral Directors Association at a median cost of $6,078.
These are costs that most families do not think to budget for in the near or distant future. That is not even considering the cost of travel, meals, and lodging, catering for family and friends, and even funeral appropriate clothes and more.
Most experts recommend rounding up to $10,000 to cover all the added expenses that are not under that umbrella of funeral costs. Yes, there is the option for your family to use finale expense insurance policies, but those are only available to individuals that are 50 or older. So, what is a 34-year-old, married man, with three children left to do?
How Much Do You Need?
Two great tips suggested by The Simple Dollar is to go with the general rule of thumb of buying at least ten times your annual salary. Let’s say you make $60,000 a year, according to the general rule of thumb you need to look for a $600,000 life insurance policy.
Alternatively, you can add up monthly expenses (including mortgage and loans), additional liabilities you want to be covered, and any other obligations. For a lot of us that broad calculation does not fit into our budget and realistically is not what we would consider affordable life insurance plans.
The bigger question is when is the right time to start and what are the best options for my family and me?
Term vs. Whole Life Insurance
These are two of the best options for affordable life insurance plans because there are several budget-friendly options. According to nerdwallet.com, the most significant difference, between term and whole is that term is only in effect for a certain amount of years, while whole is for the entirety of your life.
Younger adults have elected to get whole life insurance because they can find low-cost options, and the money can build as they go through life. Families get term life insurance so that during the time that it would be in effect, it covers the living expenditures such as their mortgage, vehicles, and more.
As an independent insurance agent, Hegarty-Haynes Insurance, Inc. is committed to educating Arizonans and providing solid life insurance plan quotes at competitive rates. We also provide auto, home/renters, and business insurance. Contact us today at (480) 820-2297 for a free insurance quote.