Health & Fitness
You're Worth HOW Much?
Be sure you're adequately insured. Understand the amounts and types of policies you might consider in the life insurance arena.
In the life and disability insurance arena, I'm often asked "how much should I be insured for?" In my opinion, the old adage of "ten times salary" is useless. For example, you make $50,000/year and have 4 children. You buy life insurance in the hopes that if you were not here, they would go to college and your wife could pay off the house. So, based on ten times salary, you buy a $500,000 policy.
How could that decision play out? Well, my son goes to Central Michigan University right now which is $18,000/year. So, at today's dollars, $288,000 is trimmed off that policy immediately, reserving it for college. Your wife would have roughly $200,000 to pay off the house and live forever on. Hey, it's better than having NO insurance, I'll give you that.
A better way? I like to use what we call "human life value". If you make $50,000 and you're 34 years old with 4 children and you intend to work till age 67? Do the math and your "value" to your family until age 67 is $1,650,000. And that's never factoring in a raise.
Find out what's happening in Brightonwith free, real-time updates from Patch.
Big difference. Especially should something happen to you. Which is exactly why we buy insurance. For the "if something happens" moments in our world.
Determining the right amount of insurance is just the tip of the iceberg with life insurance. Then there's "what kind?" "what company". It can be complex. Please be sure that you understand what you're buying and why you're buying.
