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image of life insurance as a key board buttonMany individuals are overwhelmed by the decisions involved in purchasing life insurance. How much do I buy? When do I buy? How do I buy? But help is available in the form of an independent insurance agent. These professionals are trained to guide you through the process of selecting an appropriate life insurance policy for the needs of your family. And it’s important to do so because approximately 40 percent of Americans admit that they would experience immediate financial trouble if the primary or sole wage earner of the household were to die.

Life insurance is designed to protect the financial future of your loved ones in the tragic event of your death. It does this by providing benefits that act as a form of wage replacement, which can also be used to pay funeral expenses and wipe away any outstanding debts. Life insurance allows your family to keep on living the lifestyle they’re accustomed to and retain financial stability during such a hard, tragic time.

How much life insurance should you buy? Many financial planners recommend purchasing a policy worth at least ten times your annual salary. But life insurance is not a one-size-fits-all type of insurance. You can run the following calculations to determine the right amount for you:

·         How many years will it take for your spouse or children to be able to replace the income you earned? Multiply this value by your annual salary to determine your full estimated contribution.

·         Calculate the total value of your assets that could be liquidated in an emergency situation. Then add up your debts, mortgages and loans that need to be paid, including funeral expenses, medical bills and taxes. Subtract your debts from the value of your assets to determine your household net worth.

·         Add your household net worth to your full estimated contribution to determine the estimated amount of life insurance necessary to protect your family’s financial security.

When should you buy life insurance? The younger, the better. Insurance companies base premiums on the risk posed by the insured. Younger individuals are generally healthy, whereas middle-aged individuals may have developed health issues, making them more risky. If you buy life insurance young, you lock in a premium rate that will likely be on the lower side. Your independent agent can help you decide when the time is right to purchase life insurance, and can also shop around for quotes on your behalf.

Protect your family for years to come. Call Allen Harmon Agency at (269) 441-5156 for more information on Battle Creek life insurance.

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