Life insurance is confusing for many individuals since there are so many cloudy answers to concerns about how big of a policy to purchase, when to purchase it and what type of policy to purchase. But don’t forgo life insurance just because it’s confusing. Approximately 40% of people admit that they would experience immediate financial trouble if the primary wage earner in their household died. It’s important to ensure the financial stability of your family, and your independent agent can help you secure the right policy for you and your loved ones.
Many financial planners recommend that you purchase a life insurance policy worth at least ten times your annual income. While planning with your agent, consider the following calculations to determine the right amount for you:
- Note your current annual income and how many years your spouse or children will need to replace that value. Multiply your income by the number of years to determine your full estimated contribution.
- Add up the value of your assets that could be liquidated in an emergency situation, along with your debts, mortgages and loans that need to be paid (include funeral expenses, medical bills and taxes). Subtract the debts from the value of your assets to determine your household net worth.
- Add the net worth to the full estimated contribution amount to determine an estimation for the amount of life insurance necessary to ensure your family’s financial security.
The younger you are when you purchase your life policy, the cheaper the rate you lock in. Life insurance premiums are based on your age and risks, largely focused on your health. If you buy a policy when you’re younger and in better health, your locked in rates will be much cheaper than if you were to purchase a policy after developing health issues later in life.
Ensure the continued protection of your family for years to come. Call us at 405-373-2977 for more information on Oklahoma City life insurance.