What Determines My Life Insurance Needs
Well it depends on your situation...
Replacing Annual Income
- This may seem like an obvious reason to have life insurance, but it is extremely important to make sure that your loved ones are provided for in the case of a tragedy.
- In 2014, the median household income was $53,8911
College Costs for Children
- The cost of sending a child to college is increasing every year. Life insurance may be a way to fund your children's college education.
- The average cost of private four-year college is $42,419 per year2.
- The average cost of public four-year college is $18,943 per year2.
Value of your Services at Home
- These services can range from child care to mowing the lawn. It is any service that would need to be replaced if you were no longer there to provide it.
- Your services at home are often overlooked. If paid, a stay at home parent would earn $118,905 annually3.
Final Expenses
- Final expenses are something no one wants to think about, but they can add up quickly.
- The average funeral cost today is between $7,000-$10,0004.
Debt (Mortgage, Credit Card, etc)
- Life insurance death benefit proceeds are federal income tax free, and may pay off or reduce any outstanding debt.
- The average American home mortgage debt is $155,1925.
- The average credit card debt per household in the United States is $15,6115.
Employer Provided Benefits
- Any employer sponsored life, health, or disability insurance benefit may have to be replaced in the event of a tragedy.
- Over the past decade, health care premiums have risen 89%6.
These are just a few factors that may go into determining your life insurance needs. Remember, the best way to make sure your life insurance needs are met is to meet with a financial professional who is a qualified life insurance agent.
1 http://money.cnn.com/2014/08/20/news/economy/median-income/
2 http://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2014-15
3 http://www.salary.com/2014-mothers-day-infographics/
4 http://funeral-tips.com/funeral-costs-how-much-does-an-average-funeral-cost/
5 http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/
6 http://kff.org/report-section/2013-summary-of-findings/
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