Once you have decided that you are ready to purchase Term Life Insurance the first question you should ask yourself is: how much coverage do I need? This is an important question because the amount of coverage you have will be the amount your family receives in the event of your passing. The amount of coverage you get should reflect several financial considerations, including your income, debts and financial investments (such as a mortgage).
You may wonder why you should include financial investments in your portfolio calculations. The simple answer is, if you were to pass before it is paid off, your insurance payout could be used to completely pay off your mortgage. Below is a great “infographic” from the Life Foundation (http://www.lifehappens.org) that details just how much coverage you may need….
As you can see, many people underestimate the amount of coverage they may require. This is why it is important when purchasing term life insurance to speak with a knowledgeable agent. Like any major purchase or decision, it is best to compare your options. Different term life insurance companies offer different rates based on different risks, age and a variety of other factors. Comparing your options will help ensure that you get the lowest premiums for the most amount of coverage possible. It is in instances like this that using an independent insurance agency, like SelectQuote, which will help compare companies, policies and rates for you … it is a smart decision.