Are you looking to protect your family with life insurance? Different ages and situations call for different types of coverage.
Parents of children should consider 10-15 times your gross income for coverage amounts. In terms of types of life insurance, you should look first at Term Life Insurance. Term life insurance has a variety of available durations such as 10,20 or even as long as 30 years. Consider a term duration that matches closely with your timeframe to retirement. This ensures that you have locked in coverage until your children are financially independent, your mortgage is paid off, and you have sufficient savings for retirement.
Life insurance for children is often a smaller amount of coverage, and is typically permanent/lifetime life insurance instead of term insurance. We have more information in this article on life insurance for children. However, a common solution would be $100,000-$250,000 of whole life insurance.
As we grow older and our financial dependents become ‘independent’ our need for life insurance is often less in terms of coverage amounts, but longer in terms of coverage timeframe (i.e. we start looking at life insurance for funeral and final expenses – expenses that require lifetime coverage instead of term life insurance). There’s also need to cover any reduction in pension benefits in the event of a spouse’s death, and often a small remaining mortgage.
The solution in this case is often a $100,000 whole life insurance or term to 100 life insurance policy.
If you are in a relationship and assume that your partner is financially independent in the event of your death, a reasonable solution is often term life insurance, in the amount of any remaining mortgage (plus rounded up a bit to account for any outstanding debt). This allows your partner to pay off the house in the event of your death, then maintain their lifestyle under their own income.
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