The amount of life insurance you need will change with your life. Getting married, growing your family or getting a new job are all good times to review your life insurance needs. Even if you already have some life insurance, it’s important to make sure you have enough.
A general guideline is to have coverage equal to seven to ten times your annual salary.1
That might sound like a lot, but consider this: It can take years for a family to financially recover from the loss of a loved one.2 Even if you already have some life insurance, are you sure that it could meet your financial needs?
Life insurance can be an important part of your financial wellness as your life changes.
If you pass away and don't have life insurance, final expenses and other costs could be a burden on those around you. For example, the average cost of a funeral is $8,000–$10,000.4 And if anyone, like a parent, has co-signed for loans or other types of debt you have — including some student loans — that person could be responsible for the debt, or related taxes.5
Hoping to head into retirement within the next five to 10 years? Congratulations! Maybe you plan to travel, or shift your professional life into consulting or part-time gigs. As you reflect and recognize how far you’ve come, you may also want to look more closely at the legacy you’d like to leave.
Life insurance is paid directly to your beneficiaries, generally not subject to income taxes, and the value is not affected by market conditions.
Purchasing life insurance through work is often less expensive because of the buying power of a group. What’s more, the process can be easier, especially if the coverage your employer is offering does not require health questions or a medical exam, and premiums are paid through convenient and automatic payroll deductions.
Life insurance – especially when obtained through your workplace – is likely more affordable than you think. A 2022 study revealed more than half of consumers think that life insurance coverage costs are three times more than they are in reality, and 43% of millennials (those between the ages of 27-42 years old) believe the costs are six times higher.7
Yes, you can take the coverage with you if you change jobs or retire. You will pay the premium yourself, typically on a monthly or annual basis, and it will be different than the group rate.
Review the benefits offered through your workplace and determine how much life insurance is available to you. If your employer provides life insurance as a benefit, consider this an easy and convenient way to secure additional financial protection for who and what you love.