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Can You Have Too Much Life Insurance Coverage?

Is there such a thing as too much life insurance? If you’re shopping for life insurance, one of the questions you might be asking yourself is, “How much life insurance do I need?” Well, the answer is that your coverage should meet your specific needs. But more is not necessarily better, since the higher the coverage amount you purchase, the higher your premiums will be. To choose the appropriate amount of life insurance coverage for you and your family, there has to be a balance between how much you want to spend and how much coverage you want. But if you’re thinking that your policy has more coverage than you need, you do have the option of reducing your coverage, which will allow you to also save on premiums.

How Much Life Insurance Do You Need?

When trying to decide on the amount of coverage that you need for your life insurance policy, remember that it depends on your specific situation. The amount of coverage you need will depend on your plans and goals for your future and the future of your family, and on how much money they need now and will need in the future.

How To Determine How Much You Need

To be more specific, to determine how much life insurance coverage you need, you’ll have to take into consideration two major factors:

Income replacement – Decide how many years of income you would like to replace for your family, then take that number and multiply it by your annual income.
What will need to be paid off – Add up all the debt that you currently have, including mortgages, credit card debt, bank loans, and any other debt. Once you’ve calculated that amount, add it to the income replacement amount.

Finally, to make sure you aren’t overpaying for a policy that is bigger than you need, subtract the current value of your estate from those two numbers. This will help you get a more accurate idea of how much your family will need in the event of your passing.

To give you a good baseline, many life insurance experts generally recommend that you multiply your annual salary by 10 and choose a policy of that size. That way you know that your family will be taken care of for at least a few years, and will have a replacement for your income to cover their debts and expenses.

magnifying glass with an eye in it — *The best way to find a great plan is by comparing plans from different life insurance companies.*

Finding The Right Type of Life Insurance

Your family has financial obligations that will not go away when you are gone; they will need your help more than ever with their expenses, and the last thing you want them to worry about is money while they are grieving. There are many great affordable life insurance options to choose from that will provide enough money for your family, for a low monthly price. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Flat Extra Charges For Life Insurance

One of the worst things that can happen when you are purchasing anything is finding that there are extra charges that you were not expecting. With life insurance, if you are shopping and have a high-risk situation, whether it is a medical condition or a job, then you might face flat extra charges for life insurance. The flat extra charges will be added to your policy, and if you’re wondering what these flat extra charges are, how much they will be, and if you can avoid it… well the answer is yes and no.

Flat Extra Charges

illustration of money — *Flat extra charges can be added for a short period of time or the entire term of your life insurance policy.*

Any extra charge that can be added to your life insurance policy is also known as a flat extra premium. The flat extra premium is an additional charge that is added to the regular premium of your life insurance policy. It can be added for a short period of time or the entire term of your life insurance policy.

Life Insurance Table Ratings

Flat extra charges can only be added depending on your health class rating. Each life insurance company will look at health conditions and rate them differently. Generally, they will categorize or rate class into the following health class ratings:

Preferred Plus / Preferred Best
Preferred
Standard Plus / Regular Plus
Standard / Regular
Substandard / Table Rated

If you have great health and no risks such as high-risk hobby or job, then you would qualify for a preferred plus plan. The more that you add on risks, the rate class will move up to the next health class. For example, if you fall under a standard health class risk, then a flat extra charge can be short-term, ranging anywhere from two to four years, or it can be long-term, depending on the life insurance company.

As we stated, each life insurance company will rate certain conditions differently. Some will consider diabetes a higher risk, while others will consider your diabetes if controlled a lower risk. This is why it is very important to shop around and compare plans from different companies so you know that you are getting the best rate and coverage possible. And if you do score high based on your health condition and other risks, then know that you will have a flat extra charge added on to your policy.

Finding An Affordable Plan

Is It Time to Review Your Life Insurance Coverage?

A lot of people consider buying life insurance a one-and-done thing. And sure, once you purchase a policy, your family will be financially protected, as long as you keep paying your premiums. But with that being said, there are certain situations in life when you should review your life insurance policy, and decide if you need to increase your coverage, decrease it, or even change policies.

When Your Finances Change

Have you recently lost your job? Started a new job? Gotten a raise? Well, while your income doesn’t affect your life insurance premium, it does affect how much coverage you will need to make sure your family is financially taken care of when you are gone. For example, if you have gotten a raise, your lifestyle might change, and your expenses might increase, which means you will need to get more coverage for your family than you might currently have.

Growing Your Family

Whether you’re thinking about adopting a new child, fostering a child, having a new baby, or getting married and bringing stepchildren into your family, you will need to think about your life insurance coverage. More people in the home means that you have more mouths to feed, more schools to pay for, and more debt.

Term Life Expires

If you purchased a term life insurance policy 20 or 30 years ago, your life is bound to be very different now from what it was like then, including in terms of finances. So if it’s time to consider renewing your term life insurance policy, you should re-evaluate your needs, since you might need a bigger or smaller policy.

The Same Time Every Year

You always need to review your policy when your life changes, but you should also try to do so at the same time every year, such as the date that you purchased your policy. This date will be a good time to make sure that your automatic payments are going through, double-check your billing account information, evaluate your coverage amount, ensure you have the correct beneficiary listed, and check that everything else in your policy is correct.

Need Help?

Why Coverage Matters for Caregivers

If you take care of a loved one, know that you are not alone. One recent study shows that 43 million Americans are currently acting as unpaid caregivers for a loved one. This can create a large financial burden on you and your family, but one way you can be sure that your family will be financially secure and still able to care for your loved one, even if something happens to you, is by purchasing life insurance.

The Cost of Caregiving

hundred dollar bill burning — *The cost of caring for a loved one is almost $7,000 a year!*

If you are caring at home for a loved one, you’re probably dealing with a lot of extra expenses, including the costs of their prescriptions and any home modifications necessary to make them feel comfortable. AARP estimates that the out-of-pocket cost of caring for a loved one is almost $7,000 a year, and the inflation we are currently dealing with will certainly do nothing to help.

And it’s not just the expense of caring for a loved one: you also put a lot of time and energy into helping your loved one bathe, feeding them, and providing any other care that they need, which would be expensive if you were to hire someone else to do it.

The Toll Caregiving Takes On Your Job

Taking care of a loved one comes with responsibilities that can leave you stretched financially, but unfortunately, you might have to take time off of work (which will generally be unpaid), if the bulk of the caregiving falls on you. A lot of employers will offer flexible leave, but it won’t last forever. This can take a toll on your paycheck and your career: in fact, nearly a quarter of caregivers have to stop working entirely when taking care of a loved one, and opt for early retirement.

Doing this could mean taking a hit to your nest egg, and could make it harder to save for the future of your own family. But having a life insurance policy is an affordable way to make sure that you have enough money to pass on to your family, especially if you’ve chosen to take early retirement.

woman blowing her nose — *A recent survey found that nearly a third of caregivers go without routine physical or dental care, or skip or postpone treatment.*

You Need Help, Too

When you’re taking care of someone, it’s easy to focus all of your attention and time on them, and not on yourself. A recent survey found that nearly a third of caregivers go without routine physical or dental care, or skip or postpone treatment. But it’s important to learn to take care of yourself, as well!

Taking better care of yourself means finding ways to relieve stress and worry less, and one way you can do this is by purchasing life insurance coverage. Having a policy will give you the peace of mind that comes with knowing your loved ones will be safe and secure in the future. And the best way to get an affordable policy is to make sure you’re in good health, so take good care of yourself!

The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Life Insurance for Dads: 4 Things To Know

If you’re a dad, you’re probably the go-to guy in your family for a whole lot of issues. Your family relies on you every day, probably more than you even know, so what would they do if something were to happen to you? Aside from dealing with the immense grief of losing their husband and father, they would also struggle financially without you.

Unfortunately, though, studies show that an estimated 1 in 4 men do not have life insurance, and many are not even sure what the purpose of a policy is. But before you write off the need for life insurance, or before you begin searching for a policy if you are planning on purchasing one, there are some important things you need to know.

1. Your Employer’s Life Insurance Is Not Enough

puzzle with a missing piece — *Employer life insurance is usually not enough to help your family when you are gone.*

A lot of employers offer life insurance to their employees for a very low monthly cost. You might be tempted to think that this coverage is enough, and you won’t need another policy, but the reality is most of the time employer-based life insurance simply doesn’t provide enough coverage for the average family. Many studies show that you should have a policy that is at least seven to ten times your income, which is generally not possible with employer-based life insurance. In addition, if you leave your job, you will lose that life insurance policy.

2. Children Are Expensive!

This will probably come as no surprise to you, but raising children is not cheap. According to the US Department of Agriculture, the average cost of raising a child from birth to age 17 is almost a quarter of a million dollars! And this does not include the cost of college tuition, if you are planning on helping them with that. So consider what would happen if you weren’t around to help. Fortunately, life insurance is a great way to help your spouse continue to raise your children and provide for them no matter what happens.

3. Your Spouse Needs Your Help

black and white picture of a married man and woman — *Your spouse will need help with bills and debts when you are gone.*

You took a vow to love and protect your spouse for as long as you both shall live, but those vows should actually go beyond that. Your spouse needs your help now while you’re raising your family, but they would need your help more than ever if you were to pass away. You can make sure that they would be taken care of with life insurance, which can provide help paying the bills, caring for the kids, and more.

4. Coverage Is More Affordable Than You Think

One of the main reasons that people don’t buy life insurance is that they think it’s more expensive than it actually is. In fact, research shows that consumers think life insurance is nearly three times more expensive than it really is, which is why many don’t even look into it. However, what most people don’t know is that a $250,000 10-year term life insurance policy for a healthy 30-year-old man can cost as little as $14 a month! Not to mention, the younger that you are, the cheaper your rates will be, which is why it is important to begin looking into life insurance as soon as possible.

Protecting Your Family

So all you dads out there, remember: your family has financial obligations that will not go away when you are gone; they will need your help more than ever with their expenses, and the last thing you want them to worry about is money while they are grieving. There are many great affordable life insurance options to choose from that will provide enough money for your family, for a low monthly price.

4 Misconceptions About Life Insurance

There are many misconceptions about life insurance, and these misconceptions can turn people off from even looking into purchasing a policy. In fact, a lot of people are just plain confused about life insurance! To help clear things up, we want to talk here about what life insurance is not, in order to help give you a better understanding of this subject, and address some of the misconceptions you might have about it.

1. Life insurance is not a luxury item

Although it might seem like life insurance is only for people who are well-off, it isn’t. Life insurance is not a luxury item, even though many people think it’s too expensive to fit into their family’s budget. In fact, nothing could be further from the truth: life insurance can often cost the same as a monthly subscription to a music streaming service, or a meal at a restaurant.

2. Life insurance is not just for covering funeral expenses

Yes, many people purchase life insurance specifically to cover funeral expenses, but life insurance can cover so much more. Funerals can cost around $10,000, but even some of the most affordable policies can offer much more coverage than this, meaning they can help with replacing lost income, making mortgage payments, and raising children.

3. Life insurance through your employer is not enough

A lot of people don’t purchase life insurance because they have a policy through their job, and they think they are fully covered with this employer-based life insurance. And don’t get us wrong: employer-based policies are great because they are often very affordable, but they’re usually limited to providing coverage equal to only one or two times your salary, or a fixed amount like $100,000. Research, though, shows that you should have coverage that is five to ten times your income. Not only that, but you will lose your coverage if you leave the job or are terminated. You can consider keeping your life insurance policy through your employer, as well as purchasing a private policy to make up the difference.

4. Life insurance is not just for healthy people

Life insurance is indeed cheaper when you are healthier and younger, but that doesn’t mean you can’t find an affordable policy if you aren’t young and healthy. Even if you have certain health conditions, like diabetes or high blood pressure, it’s still possible to qualify for a great policy, as long as your medical conditions are under control. And if you are worried about qualifying for a policy, know that there are policies available to you that do not require a medical exam or medical questions.

Hopefully, all of this has cleared things up for you, and has shown that life insurance is for everyone, and is affordable. Because remember, your family has financial obligations that will not go away when you are gone; they will need your help more than ever with their expenses, and the last thing you want them to worry about is money while they are grieving. There are many great affordable life insurance options to choose from that will provide enough money for your family, for a low monthly price.

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