Fighting to evade taxes or preventing death is a lost cause. All you can do is prepare yourself and your family for it.
Apart from the assets that you’ll leave for your family, you also need to leave funds for them that help cover the miscellaneous expenses. Living is not easy especially with medical bills, college tuition, grocery bills and all the other costs making it hard for you to get through the day!
If you’re the only salaried member in a family of dependents, you need life insurance even more. But determining the amount of insurance that your family will need after you is hard to estimate. This is why you need to keep the following factors in mind.
Even though we can categorize some standard expenses that every family has, you can have your own unique expenses as well. If you have a young child who’s in their growing years, the main expense would be the cost of raising them. The USDA estimated the total expenses incurred during child-rearing and it amounts to $14,000 per year in 2015. The cost can fluctuate over the years, owing to inflation and other economic pressures.
Since this figure applies to a newborn child’s expenses, the estimate can go up drastically for a child older than 18 years of age. A report confirms that in 2019–20, the median college tuition cost estimated for full-time undergraduate students is $12,710. Bear that in mind while determining your insurance amount.
Debts and Liabilities
It’s highly advised that you pay off all your loans in your lifetime. If you’re nearing old age and health concerns have started showing up, you should start thinking about how your family will live without you. This includes leaving them with the burden of paying off your outstanding dues.
In case you’re unable to pay off all your loans and you’re aware of that possibility, you need to determine the life insurance amount accordingly. This can become an added liability if your spouse or child has co-signed any loan (mortgage loan, student loan, etc.) with you because then they’re legally responsible for paying it off. Make sure your beneficiaries have enough funds to pay off your debt.
Your spouse and child may not be your only dependents. You can also have an aging parent or another family member who depended for sustenance on you. Even having one more person added to your list of dependents can increase the life insurance amount required by several thousand. You also have to accommodate medical expenses for a parent who has special healthcare needs. It’s best to allow experts to appropriate the amount of insurance for all your dependents.
If you’re interested in collecting more information on life insurance policies before determining an amount, get in touch with our life term insurance broker FL or call us at (800) 381-1245. We are part of a network of life insurance Pinellas County and can offer you expert advice on what suits your needs best.