What kind of life insurance is best for me?

By Hudson Toews
WoodmenLife Representative

If you’re hoping to learn about a single life insurance plan that will meet every last one your needs, you won’t find it here. In fact, you won’t find it anywhere. Taking out a life insurance policy means preparing for the worst ahead of time, and a good way to ensure everything is taken care of is to have coverage that meets your short-term and long-term needs and obligations.

It’s important to have an accurate estimate of what coverage you’ll need in case you die. If you don’t, those who depend on you may be affected not only emotionally, but also financially. Fortunately, you can find this estimate by following a few easy steps.

Calculate How Much Life Insurance You Need

The first step in finding a suitable plan is to conduct a needs analysis.

This simple process estimates the cost of covering expenses (family and dependents, debts, funeral costs, etc.) left behind after your death.

Ideally, a life insurance policy will cover what your current or predicted financial assets won’t.

People typically use one of three calculations to figure out how much life insurance they need:

• Their annual income multiplied by 10
• Their annual income multiplied by 10 plus an additional $100,000 per child
• The amount needed to pay off their mortgage, debt, funeral expenses and children’s college costs

Why Work Life Insurance Isn’t Enough

While some think that employer-sponsored policies are enough, they often can’t cover expenses left after death. This kind of policy can help cover immediate costs death brings, but your family’s long-term financial stability can still be in jeopardy.

This type of insurance may be enough for those who have no dependents or debts. For many people, however, there are additional expenses or obligations to account for.

Weigh the Benefits of Term Life and Whole Life Insurance

Term and whole life insurance are different products that cover similar needs.

Term Life Insurance

Term life insurance is essentially a safety net for the near future. Plans are typically very affordable and cover terms of 10, 20 or 30 years. While it may be cheaper than whole, it only pays out if the insured individual dies within the policy term period.

This type of insurance is good for people who have young families, business expenses, debts, or other obligations they’d need covered in case they die. It protects the people who depend on you and ensures they won’t be burdened with financial obligations you leave behind.

Whole Life Insurance

Whole life insurance is a policy that you purchase to last until the end of your life. Unlike term life insurance, the premiums you pay stay level and build cash value. Although premiums are typically higher than a term policy, whole life insurance can last a lifetime.

Determine Which Products Are Right for You

To help you find a combination that is both affordable and efficient, there are a few questions you should ask yourself as well as your insurance Representative:

• How much can I afford to pay?
• How much does my family need to not suffer financially?
• What are my assets, and how big of a financial gap needs to be insured?
• How much does my family need to continue their standard of living?
• What debts and other expenses will need to be covered?
• How much needs to be allocated for funeral costs?
• Do I want to pay more now and receive cash sooner, or pay until I die?

By answering these questions, you and your Representative should be able to come up with a great combination of both short- and long-term plans to reach your goals. If you don’t have a current life insurance representative, the representatives at WoodmenLife would be happy to answer any questions you may have. Feel free to call or email me anytime.