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It may not be a fun thing to think about but as a couple with kids 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 changed 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? According to the Federal Trade Commission, average costs can include casket (slightly more than $2,000 on average), embalming, cemetery plots, hearse rental, and more. Cremation is cheaper, but still have costs.
- Financial Assistance: Do you want to leave money for your spouse and/or children to cover debts and help with future expenses?
Whatever amount you two come up with, please make sure you each understand each other's view.
Getting this done now when you're both in good spirits and health will make a distressing situation a little less painful.
Getting Life Insurance
If you're young and in good health, you'll be surprised at how cheap term life insurance premiums 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?