There are many benefits you accrue when you purchase life insurance from the Jason Ridley Agency of Colleyville, TX. The most obvious one is cushioning your dependents financially even when you pass on. While life insurance offers numerous benefits, do you know how much you need? How do you ensure that you have adequate life insurance to cover your financial interests? If you are about to invest in life insurance, the first step is to figure out how much you need.
Understand your financial landscape
How does your financial picture look like? The first thing to see how much life insurance you need is to understand the big picture of your financial landscape. This way, you can establish how life insurance fits in the plan. Unsure of where to start? A knowledgeable insurance agent can help you spot gaps and strengths of your financial plan and help you figure out how life insurance can plug in your plan.
Calculating how much life insurance you need
Establishing the amount of life insurance you need doesn’t require you to be a mathematics guru. A few simple formulas can help you achieve your goal. These include:
10 times income rule
While it’s not the best rule, it can give you a rough idea of how much life insurance you need. On the flip side, this rule doesn’t consider your family needs, current savings, and the number of life insurance policies you have.
The DIME formula
This method enables you to take a deeper dive into your finances. This rule postulates that you should consider your debts, income, mortgage, and education when determining your life insurance needs.
In addition, if you would want to know how much life insurance you need, you can use life insurance calculators. Better yet, you can sit down with an agent like Jason Ridley Agency to help you determine the life insurance needs. If you need help, please contact us today or visit our Colleyville, TX offices to have a sit-down with one of our agents.
No two lives are the same – your career, family, personal beliefs, and experiences are unique to you. That’s why life insurance does not come in a "one size fits all" policy. Deciding what will be most beneficial to your loved ones can be stressful, but our team at the Jason Ridley Agency in Colleyville, TX is here to help you navigate your options. One of the biggest things you’ll need to decide upfront will be whole or term life coverage.
Whole Life Insurance
A whole life insurance policy is "permanent insurance" intended to stay in place for the rest of your life, guaranteed to payout after your death. While the premiums typically stay the same, the value of the policy will rise over time. You can also borrow amounts of funds against the account during your life (any amount not repaid will be withdrawn from the final benefit). You can also "surrender" the policy for a direct payment, in which case your coverage will end.
Term Life Insurance
As the name suggests, term life insurance is only active for designated periods of time, i.e., 15 to 20 years. You will pay premiums only during this time, after which your coverage will end. The cash value is preset and does not change.
Which is the Right Choice for Me?
The right kind of life insurance for you will depend on your specific needs and budget. For example, many parents opt for term life because they only want coverage as long as their children are dependent on them. Others choose whole life because they don’t know what to expect in the future, and they want to make sure they are covered no matter what. It’s worth pointing out that whole life insurance is generally more complex and costly, but it comes with more advantages than term life. Term life is simpler and more affordable.
Contact the Jason Ridley Agency to learn more about your life insurance options in the Colleyville, TX area!
That is a question that many of us ask ourselves, and the answer is yes, we should all obtain a policy for the security and peace of mind it provides.
Life insurance is vital for several reasons. If you, unfortunately, die suddenly and are the main breadwinner of your family, you want to ensure that your family will be provided for and will still be able to pay all of the bills when you are gone. Many of us may have a policy through our employer. Still, normally the amount of money it provides will only be enough for our funeral and burial expenses, leaving our loved ones with no income from us to help pay the usual monthly bills.
Reasons to Secure a Life Insurance Policy
A life insurance policy can provide for your family after you are gone from this earth, and it can also, depending on the amount of the policy, allow them to pay off significant amounts of debts. In many cases, your family will be able to pay off the mortgage and not have that payment to worry about in the future, and it can help provide for older children to attend college.
A life insurance policy will also provide money for your children to purchase a home or start a business if you die unexpectedly.
Certain policies will allow you to borrow money throughout your lifetime from your life insurance policy, which means you can pay off debt before you die, leaving your family in a better financial situation. This provides you with the peace of mind you want and deserve.
Do you need a life insurance policy? If the answer is yes, contact the trusted and experienced life insurance agents at the Jason Ridley Agency in Colleyville, TX today!