Why Life Insurance Belongs on Your To-Do-List
Having the appropriate amount of life insurance is more affordable than you may think.
Purchasing life insurance may not be on your to-do list for a variety of reasons – not wanting to add another monthly expense to an already-stretched budget, thinking about your mortality or simply not having the time. But researching the appropriate amount of coverage is a critical step for your family now and in the future. According to the 2016 Amica Life Financial Peace of Mind Survey, 87 percent of respondents agreed that everyone with someone depending on their income should have some form of life insurance.1
The hardest part of purchasing life insurance is getting started. Once you do, you will likely discover that obtaining the appropriate coverage to help protect your family is easier – and more affordable – than you thought.
How Much Coverage Is Enough?
Employer-provided life insurance is a great benefit – and a decent start. But is your policy coverage enough for your family’s needs? Most employer-sponsored policies cover no more than twice your income, if that.
“A good rule of thumb is that most people need between seven and 10 times their income to truly protect their family,” says Frank Muscat, senior assistant vice president at Amica Life. “A policy that covers one to two times your income is a good start, but it’s not enough.”
Should either you or your spouse pass away, the life insurance policy of the deceased can help cover things like the mortgage, your children’s education fund, child care and household expenses, other family member support, funeral costs and additional final expenses.
In just a few minutes, Amica Life’s needs calculator can help you figure out how much life insurance you need. You might be surprised by the amount that you need, but the cost of coverage might be much less than you expected.
“A good rule of thumb is that most people need between seven and 10 times their income to truly protect their family.” – Frank Muscat, Amica Life
What type of insurance policy is best for you?
Here are two of the most common types of life insurance:
Term Life Insurance: This policy covers you for a specific amount of time, typically a period of 10, 15, 20, 25 or 30 years. The cost and the coverage typically stay the same for the length of the policy.
Permanent Life Insurance: This policy covers you for your lifetime, as long as the premiums are paid. In addition, over time this policy builds cash value, which can be used to pay premiums or other expenses as the policy matures.
If you aren’t sure which type of policy is best for your family’s needs, an Amica Life insurance specialist can help with this decision.
The biggest stumbling block when purchasing life insurance can be having the initial conversation.
“A lot of people don’t have life insurance, and they have a family and dependents, so it’s important that they take care of them,” Muscat says. “But it’s not a fun topic; it’s not easy to talk about.”
But the good news is that getting coverage is a lot faster and easier than it used to be. The application process can be handled completely online or over the phone – no need to travel to an in-person meeting. If you need an exam, and not everyone will, someone can visit your home or office at a time convenient for you.
“The life insurance decision is an easy one to put off because nobody forces you to have it,” Muscat says. “But it’s important for your family. It’s your ability to continue to generate income for them.”
- 2016 Amica Life Financial Peace of Mind Survey, 2016.
ALIC34618 (exp. 12/19)