Today is officially Life Insurance Day thanks to the dedicated work of Jeff Rose.
If you haven’t recently checked, today would be a good day to sit down as a couple to make sure you have enough life insurance to cover your family’s needs.
Earlier this year I increased my term life policy in part to leave something for raising our baby girl should something happen to me. It may not be a fun thing to think about but as a couple with parents we knew we needed to review all of our finances this year to make sure the big things were taken care of.
If your family situation since the time you’ve bought a policy, re-calculating your needs can be significantly helpful to your loved ones.
Finding the Right Number
Every family is different, but in general when you’re trying to calculate how much coverage is enough, there are a few factors to look at:
- Grieving: Losing a spouse/parent is life altering and your family needs time to grieve. If you don’t already have savings to cover the time off from work, you may want to include that with life insurance coverage.
- Final Expenses: Do you have a general idea of how much your final expenses would be? We used the estimate of $15,000 for funeral expenses.
- Financial Assistance: Do you want to leave money for your spouse and children to cover debts and help with future expenses?
For us,we would like to have the remaining debts like the mortgage paid off to lessen the financial obligations for the surviving spouse. We’d also like to have some money set aside for our little girl.
If you’re young and in good health, you’ll be surprised at how cheap term life insurance premium are. Better to get it now to take advantage of lower premiums than waiting. As you get older it can get more expensive (still an affordable option my opinion though).
Thoughts on Life Insurance for Parents
If you’re a parent, have you checked your life insurance coverage? How did you determine what you needed?