In case you haven’t heard, September is Life Insurance Awareness Month. Life Insurance Awareness Month, otherwise known as LIAM, is a nationwide campaign that was created by Life Happens in 2004. The goal of the campaign is to ensure that everyone understands the importance of having sufficient life insurance coverage.
Questions to Ask Yourself
Based on the grim nature of the subject matter, it can be difficult to think about how much money your family would need to be able to survive without you. Luckily, there are some quick, easy questions that you can ask yourself to help you evaluate whether or not you have the appropriate type and amount of life insurance coverage.
If you didn’t make it home today, how much money would your family need to live on? Looking over your monthly bank statements will help you determine how much coverage is necessary for your family to continue living comfortably even if you passed away. A good tip to remember is that your payout should be 7 to 10 times your income.
What are your assets? Your savings, stocks, bonds, real estate properties, 401(k), and additional life insurance policies all constitute as assets. Subtracting your debts from your assets is a quick way to estimate the coverage you might need. Additionally, after doing so, you may decide that you do not need to replace all your income.
How much debt do you have? The last thing you want to do is leave your family struggling with debt. Therefore, it is important to take all personal debts into consideration when deciding on a coverage amount. Think about the amount of time it would take to pay off credit cards, car loans, remaining student debt, etc., and include your mortgage in the final calculation.
Do you have any special circumstances that you need to take into consideration? Everyone’s circumstances are different, so it’s vital that you take your family’s specific wants, needs, and dreams into account. This could include tuition payments, funeral costs, care for any special needs children, financial responsibility for other relatives, etc. All those expenses should be added into the final total for coverage amounts.
Celebrating Life Insurance Awareness Month is as easy as pondering these very important questions. You love your family— observe LIAM and make sure they are covered in the event of a sudden tragedy.
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