Life insurance, how much do you really need?

I've been a licensed insurance agent for over 20 years and one of the biggest questions I get is how much life insurance I really need and so I'm going to answer that question for you and a few others in this article so make sure you stay tuned to the end where I share with you a way that you can calculate exactly how much life insurance that you need to get my name is Paris Cluff and this is financial

Self-reliance I absolutely love helping people manage protect and grow their money and in this article, we're going to talk about ways to protect your money protection insurance is one of the most powerful ways for you to be able to protect the things that are most valuable to you in your life whether it's health insurance |  car insurance | homeowners insurance but in this article, we're going to focus in on life insurance and as of the recording

For this article, it's the month of September and I don't know if you know this but September is life insurance Awareness Month so in the spirit of being aware of uh understanding and a little bit more about what life insurance is I'm going to share with you a few things that I want you to know about life insurance I also want to make sure that you realize that if you do like to get a life insurance quote you can either email me

At hello financial self reliance.net or click the link in the description below where it says ethos life and do a quote for yourself wherever you live wherever you are whatever situation you're in if you run click that link it'll take you to a place where you can actually run your own life insurance quotes after we're done with this article so that you can know exactly how much you can get and how much it'll cost you so the first question I want to answer here for you

Why is life insurance worth it now if there's somebody that you care about that would suffer financially if you were gone then you need to have life insurance and that's why life insurance is worth it if somebody you care about would have a financial burden or financial stress or strain because if you're leaving this world or this Earth then you need to have life insurance to be able to come in and replace your income that's the original reason to

Life Insurance, How Much Do You REALLY Need?

Having life insurance is to replace someone's income so if you're a breadwinner if you even if you're a secondary income to the house it's important to have life insurance so that if you pass away prematurely or before you're ready for that money that you have is the life insurance policy will come in and replace your income so the next question I want to answer here is what does life insurance cover it covers a lot of things actually I know we just

Talked about how it replaces someone's income so that those that are left behind can continue to pay the bills and live and have not had to sell the house or not have to move out or not have to live under the bridge downtown so to speak but the other reason is that it's good to have life insurance is because it can pay for funeral costs estate costs health insurance mortgage rent groceries utility car loans child care expenses another thing down here

Says future College costs spouse or Partners retirement planned inheritance charitable gifts and other things it's important to know that there are a lot of things that life insurance can pay for and there are a lot of costs not a lot of people know that when you pass away there's a lot of costs that go into that there's a lot of expenses sometimes when people pass away there are huge medical bills that are incurred as those last six months of Life are involved and if

Somebody passes away untimely or really quickly there might be some damage in a car accident or something like that so there are always great reasons to have life insurance anytime I've ever met somebody who had a loved one pass away one of the things that they've always told me is that they never got too much life insurance often they tell me that they wish they had gotten more so that's a kind of a lead-in to how much life insurance you should get

Life Insurance, How Much Do You REALLY Need?

Because most people don't realize that all of these expenses here and so you really should have enough life insurance to take care of all of these expenses another big question I get actually often is I'm young I'm single why do I need life insurance well there's a different set of reasons why each person in whatever life part of life they're in would need to have life insurance so let's start with the first person here or married or partnered

A person so clearly someone who's married or partnered if you leave someone behind that's counting on your income they're going to need to have that income replaced in order to be able to maintain their lifestyle sure they could get married again sure they could get re-partnered sure they could actually have maybe a downsize or move out or do something but the fact that they've just lost somebody that they love dearly is gonna put them in a situation where

They're gonna maybe want to make some decisions and maybe some Life Choices where they don't want to pursue the same career that they've had their whole life or up to this point up to that point so one of the things I highly recommend is that you get enough life insurance so that somebody can take a break or maybe even take time to reevaluate what they want to do for the rest of their life and not have to be struggling or hurting or quickly make decisions

Because they have no money or they need to do something quickly because they don't have enough money coming in one of the biggest things I see people do is that after a spouse or partner passes away often they'll go get remarried really quickly and often to the wrong person because and the reason why they go get married quickly is that they can't afford to live on their own that's a sad thing that can be fixed by just having the proper amount of life

Insurance so the next person is your parent parents of course if your mom or dad passes away you're going to want to have some money to be able to take care of your situation and take care of you especially if you're a minor if you're 18 or older then there's going to be some things that you're going to probably still need to do depending on if you've moved out or if you're still dependent quite a bit on your parents and what they're offering you so a lot

Of times people who are in school and they're on their parent's health insurance and other things and now you have to do that on your own you're gonna want to have some money to be able to do that so if your parents aren't don't have life insurance you're going to want to make sure that they have enough life insurance as soon as possible so that when they pass away that you have what you need to be able to take care of me if they pass away in

Life Insurance, How Much Do You REALLY Need?

In their 80s or 90s hopefully, they'll have established their career by then you'll be financially set by then but I've never had anybody tell me that an extra 50 or 100 000 or a couple hundred thousand dollars to split amongst the siblings was something that they regretted receiving so you're going to lose a loved one and that's absolutely sad and it's horrible to lose someone that you love however if you have money coming in to help take care

Of the issues that are going on once that person leaves it makes a bad situation a little bit better or maybe you could say it helps a bad situation become less bad so the next thing is retirees people who retire why do you need life insurance well a lot of people one spouse or the other will outlive and so if you have for example a husband that passes or outlives the wife then the wife may not get as much Social Security or retirement income because

Maybe the husband was working more often than not, in general, that's usually the case however if it's the wife that was working more and has more of retirement and now she's passed away and her social security may not be available to the husband as much as he was receiving and getting and hoping for so it's important to realize that even at the end stages of your life there's still income and expenses to really consider and work through as you have of

A couple that's been living together for so long and now there's one person gone you're gonna need to work on what to do now to be able to finish out those last few years of someone's life business owners need life insurance as well as part of a key person Insurance that's something but I want to get into it doesn't really talk about in this particular article why a single person or a young single person and would need to have life insurance and it's not

Critical it's not a huge thing however it is something to really think about and consider if you're a teenager or in your early 20s you might say to yourself I have no responsibilities I have nobody to look after I have nobody if I do pass away nobody's going to be financially burdened by that but I'm going to ask you this question if you died today who would pay to bury you who would pay to put you in the ground who would pay for

All of your funeral expenses and when you think about funeral expenses I want you to realize that they're 10 15 in some cases 20 000 to have a funeral and if ten or twenty thousand dollars would put somebody that you love a parent a mom a dad as Grandparents or aunts or uncles or somebody if that amount of money would put somebody in hardship then you ought to have life insurance on your life just at least to cover the bare minimum of those final expenses to

Life Insurance, How Much Do You REALLY Need?

Put yourself in the ground and make sure that all of your situations your totally your estate are settled and your life is all those end-of-life costs are taken care of so there are reasons to have life insurance if you're young and single and you don't necessarily need to to have hundreds of thousands or millions of dollars of life insurance but definitely have enough to take care of the burial expenses and those final expenses so really quickly I want to

Talk you about the different kinds of life insurance there are two major kinds one is term life insurance term is temporary so it only lasts for ten actually lasts for five to thirty years and then you can renew it after that usually if you do renew it after that is significantly more expensive but term insurance is really good because it's extremely affordable it's often just streamlined it's just the bare bones cost of the

Life insurance and you can get an excellent deal I'd rather have somebody covered with something than nothing and if all you can afford is term insurance get as much term insurance as you can for the amount of money that you can afford now I highly recommend though if somebody is really considering long-term planning or really doing some estate planning really accumulating wealth and building something worthwhile that you really look very closely into something

Called permanent Insurance there are different kinds of permanent Insurance a lot of people think of whole life there's actually one of my favorites which is called indexed universal life I said a fantastic tool it's a fantastic way to use money and store money and be do some incredible Financial things with that tool so if you want to know more about what it takes to be or have an in the permanent life insurance or whether you should do term

Or permanent make sure to send me an email at hello financial self reliance.net and I will do my best to make sure that you get the answers that you need specific to your situation also remember to click the link in the description below under ethos life and run an illustration for yourself so finally, I want to share with you that how much life insurance do I need and this is the whole purpose and point of this video I thought some of those other

Questions would be important and pertinent to you but really there are some things that you need to consider the first one is a calculation called the dime method but before I talk about what the diamond method is put in the description below do you have life insurance now are you shopping for life insurance now are you interested in getting more life insurance if you have some already do you want more so it's a let me know what kind of things you've

Life Insurance, How Much Do You REALLY Need?

Heard about life insurance and what kinds of things you're dealing with questions you might have about life insurance and what you should be doing with life insurance as part of your financial portfolio the rule of thumb on any type of life insurance is if you're young then you should go 15 times your annual income so if you're making fifty thousand dollars a year 15 times your annual income is going to be 750 000 if you're older and

You've already established and you've got some wealth you've got some retirement you've got some assets built up and some things accumulated then you can go towards you know 50s 60s somewhere in there you could probably do five times your annual income so if you make a hundred thousand dollars five times your annual income would be five hundred thousand dollars if you're somewhere in the middle there and you're in your 30s or 40s and you're you've not

Really built a ton of wealth you're not really built a lot of assets up then maybe 10 times your annual income would be good for you there although you can still go up to 15 and that's what most insurance carriers if you apply for more than 15 times your annual income they're going to start to ask you why you need that much insurance if you apply for less than that, of course, they're going to be okay with that but if you're doing less than five

Times your annual income you're really not going to have enough Insurance to take care of those final expenses and to replace income a lot of people want to buy life insurance to maybe pay off the mortgage or pay off some of their student loans or their debts and then maybe set up a fund for their kids for college or maybe set up a retirement account for this the person they leave behind to be able to then have that build and those assets build for the

Next 10 or 20 years until they retire so give that like funding like a fund that retirement account early so just make sure there's a lot of reasons why you can have different types of life insurance too so you can have maybe some term insurance to pay off the mortgage and then you can have a permanent insurance policy to kind of build that more long-term estate planning or more of the long-term planning process so you can have different kinds of life

Insurance but the dime method is the letter d stands for debts so take all your debts and add them up the next thing you want to do is take your income which we've talked about so d i is for income so your income is going to take your income and multiply that by 5 to 15 depending on your age and kind of what assets you have already built up and then M or so dim the M is for a mortgage would you want to pay your mortgage off with your life insurance if

You do great if you don't and you want to set aside a chunk of money that can then maybe you can pull off and pay the mortgage keep the mortgage there but maybe pull off some money from that asset and pay it every month then that's the M part of it and then e is for Education anything you want to do for education for your kids or maybe even education for the spouse you leave behind because if there's a job that they're in just to kind of supplement

The income and you're the major Breadwinner they may want to go back to school so they can get a degree so they can actually earn more money so they can live on their own and not have to make those decisions so the dime method is the simple easy kind of the old school the OG version of how to calculate how much life insurance you need so D is for debts I is for income M is for mortgage and E is for education and so that's the dime method I hope you've got a lot out

From this article, I hope you now know kind of how you can calculate how much life insurance you really need you'll probably find that you need more life insurance than you thought before you watched this video so I hope that you got a lot out of this again and make sure that you go into the description below click the link under ethos life and do a quote for yourself and if you have any further questions hit me up at hello financial self reliance.net I'll be happy.