Thinking about buying life insurance? That could be a smart decision, especially if you’ve recently had a major life change. Many people buy life insurance when they get married, have children or even purchase a home. Perhaps you recently launched a new business or got a big raise. Or maybe you simply want life insurance so you can leave a legacy for your loved ones.

If you haven’t purchased life insurance before, you may find your choices and options overwhelming. A wide range of different types of policies are available to meet a variety of needs. You also may be unsure of how much coverage you need or how the policy will interact with your group life insurance.

Below are a few common questions and answers about purchasing life insurance. A financial professional can help you answer additional questions and find the right protection for your needs.

Why do I need an individual policy if I have group coverage through work?

 

Many employers offer life insurance coverage as a group benefit. In fact, the insurance is often affordable or has no cost at all. If you have group coverage, you may feel like you don’t need additional protection.

However, it’s likely you still need additional protection above and beyond your group coverage. Many group policies have a cap on coverage amounts, and that maximum may not be sufficient for your needs. Also, there’s the chance that you may lose your job or change employers. The new employer may not offer the same level of protection. An individual policy helps you stay covered no matter what happens in your career.

 

How can I get the coverage I need without busting my budget?

 

Do you have a sizable insurance need but also a tight budget? If so, you probably want to maximize your premium dollars. There are two ways to do this. One is to opt for a term policy. This provides coverage for a limited duration, such as 10 or 20 years. Everything else being equal, a term policy is usually more affordable than a permanent policy.

The other way to make sure you get the most death benefit for your premiums is to buy the policy earlier rather than later. Your premiums are based on your age and your health. The older you are, the higher your premiums are likely to be. There’s also the risk that you may develop a health issue as you get older. You can avoid that risk by purchasing life insurance as soon as you identify a need.

 

How much coverage do I need?

 

There’s no universal answer for how much coverage is right for you. Many people use a simple formula, such as a multiple of income, to estimate the right coverage amount. However, those equations and formulas aren’t based on your unique needs.

The best approach is to consider the financial needs and difficulties your family may face after you pass away. Would they miss your income? Would they face sizable debts? Do you want to help them achieve certain financial goals, like retirement or higher education? A financial professional can help you estimate the cost of these objectives and project an accurate funding need.

 

Ready to develop your life insurance strategy? Let’s talk about it. Contact us today at Jim Lee Financial. We can help you analyze your needs and find the right coverage for you. Let’s connect soon and start the conversation.

 

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

 

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