You don’t have any at all.
Let’s get the obvious out of the way. If you don’t have any, it’s probably not enough. Is it possible that the right amount of coverage is none? Should you find out if that’s the case for you? Yes and Yes.
If you don’t have any life insurance, you either know you need it, think you can’t get it, or think you don’t need it. It’s probably more needed, less expensive, and easier to obtain than you think.
You only have it through your work.
Let’s be honest. Employers don’t provide nearly enough coverage to take care of things if you were to pass away. If they offer extended coverage, it still requires proving you’re healthy and likely costs more than you would pay on your own.
Group life insurance is also tied to your employment which will probably change right when it’s difficult to buy your own coverage due to your age or health situation. The coverage might be convertible but it will be very expensive.
Thank your employer for that added benefit and then get your own life insurance. Your income protection should be totally controlled by you.
You are still healthy.
When we are healthy or young or both, we can’t imagine why we should buy death protection and plan for something that won’t happen for a long time. We have more important things to do and places to spend our money that are more fun than thinking about dying.
Check the local news or your news feed on social media. Young health people die from unexpected and unplanned causes frequently. Our health can quickly change and horrible things like accidents can leave families young and old without the funds to even afford a funeral without help.
Plan to take care of business financially before you get any older or any unhealthier.
Your life partner doesn’t think you have enough.
My life insurance isn’t for when I die. That’s for the ones I leave behind. My lifestyle protection insurance is the policy that pays me if I lose my number one partner in life.
It’s easy for me to think the coverage on my own life is enough. When I stop to think about what I would do financially if I lost my wife, I wonder if she has enough coverage.
You haven’t tried to calculate how much you need.
This may be obvious to us math nerds but it’s rare that a person sits down and carefully figures it out. If you haven’t, then we can only assume that what you have isn’t enough. It’s too low whether you are single, a young parent, an empty nester, or a retired person.
It’s not only math. There are many questions to consider… What will need to be paid out if I die? What about if I lose my spouse? Would I want the mortgage paid off? What about education for my spouse or children? Will my survivors be able to save for the future without my income?
There are many “rules of thumb” out there to help you get the right amount. There are calculators online that never get used.
You haven’t worked with an experienced professional.
After the section above, you may be asking yourself this question. Who will help us go through the planning it takes to get the right amount of the right type of coverage?
A professional advisor or agent will help. I use the term “experienced professional” for a reason. They can determine how much coverage you need. They will explain the good and the bad aspects of each option. They can get you the type of plan that’s appropriate for your situation. A professional can also help find a company that doesn’t care that your relative had cancer. They’re the type of person that won’t sell you something just to get paid.
There are millions of insurance agents or places to buy online. Make sure you use an experienced professional.
It’s a simple fact that most of us don’t have enough coverage.
Fifty-four percent of Americans own some sort of life insurance (individual and/or group), which is one percent higher than in 2010. The average amount of coverage owned has increased to $168,000 but the income replacement ratio has declined to 3.4. That means it will replace just 3.4 years of income.(the average coverage number is actually the mean amount..for us math nerds)
If nearly half of us don’t have any and the other half is only insuring for 3.4 years of income, that’s not enough.
Life insurance is less expensive and easier to obtain than ever before. Take the time to find a way to protect yourself and your loved ones.
If you’ve read this far, you deserve some kind of reward! I posted an article from 2012 to the blog explaining how to calculate the amount of insurance you need.