A common question asked of life insurance agents is “How do I know if I have enough life insurance?” In the video below, Criss Crombie, the life and financial expert, explains his strategy in helping clients determine how much insurance is enough insurance. Check it out!
Life and Financial Needs Analysis
First, the insurance agent should ask their clients the question, “What do you want your life insurance to do for you?” I learned a long time ago to use what’s called the financial needs analysis, or the life insurance needs analysis. This helps you calculate what your life insurance will do for you when you’re gone. Below are some questions to ask yourself when shopping for life insurance or when reviewing your current policy:
- Is paying off your house a priority?
- Do you have debts that you need to pay off?
- Do you want to leave your children money for college?
- How are you hoping to provide for your spouse in the event that you die?
- Are you wanting to leave some money behind for your children or grandchildren?
Upon asking yourself those questions, you’ll better be able to determine whether you have enough life insurance.
Review Your Policy with a Licensed Agent
Many people have life insurance in place and have had it for a while. Some people have it through their employer, and they just assume it’s enough because it’s maybe a couple hundred thousand dollars or three times their annual income. The only way to really know if you have enough life insurance is to do the needs analysis with an insurance agent. Once you determine why you need the insurance, then you’ll know for sure if you have enough. You’ll know if you have the right amount of coverage to pay off your house, pay off your car, and maybe leave some money behind for your family.
Therefore, it’s important to do reviews. If you have a life insurance agent contact you about a review, it’d be good to sit down with them and go over your policy. Even if it’s only been a few years since you bought the policy, you should still review it periodically.
Life Insurance Questions?
We hope that this information on getting enough life insurance is useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
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