How Much Life Insurance Do I Need?

Very few people like to think about the inevitability of death. Fewer still will feel pleasure with the probability of an accidental death. In case you have to earn to take care of financial needs of someone, it can however be one of the unpleasant thought which you might want to consider. Here we take a look at two basic aspects of life insurance: first, we try to remove some of the misconception about life coverage and then we try to decipher a question which lingers in many minds, how much life insurance do I need?

Who needs Life Insurance Coverage?

It is not necessary that everyone should purchase life insurance. People who do not have any dependents, have considerable amount of assets to take care of their debts and for burial and funeral expenses, and then it does not make sense to put money in insurance. Even if a person has dependents but have sufficient assets to take care of everything, still you can do without an insurance coverage.

However, people who have dependents, significant debts, much more than the assets, then it is better to have some form of life coverage, to take care of your debts and for your loved ones in case something happens to you.

Insurance and Age

One of the biggest misconceptions perpetuated by aggressive insurance agents is that, it is difficult to get coverage as one age, so it is better to enroll when you are still young. But the fact is, the amount of money an insurance company will make depends on how long you live. For a young person, the premiums will be relatively low. In case an insured person meets a premature death, then it is a bad bet for the company.

Fortunately, and thanks to better living standards and advancements in medical field, the life expectancy have increased drastically in recent years, which means an insured person will continue to pay as long as he or she lives, and the premiums increases every year.

So when a person thinks of the question, “how much insurance do I need?” he or she should bear in mind that purchasing coverage at young age, although much more economical, but it is simply not easy to qualify for it. The fact is insurers will prefer to charge higher premiums to save them from the odds of covering an older person.

It is very rare that insurer will deny coverage to a person who is willing to pay for his or her risk category. Having said that, purchase coverage when you need it and if you need it, one should not purchase coverage just because of the fear that he or she may be denied later on.