Is a $500,000 Life Insurance Policy a Good Buy?

Lines Insurance Owner and Principal Agent Brad Lines was again asked by the folks over at moneygeek.com to provide some insights about $500,000 life insurance policies, including how a $500,000 life insurance policy works, who these policies are best suited for, and how to assess whether $500,000 in life insurance coverage is adequate for your needs. Read on for some highlights, then navigate over to MoneyGeek to read the rest.

On how a $500,000 life insurance policy works:

“A $500,000 life insurance policy provides your designated beneficiaries with a payout of $500,000 upon your passing. This money can be used for anything they need — whether it’s paying off a mortgage, covering education expenses, or supporting ongoing living costs…. For many families, this amount can provide several years of financial stability, helping them adjust to life after the loss of a loved one..”

On who these policies are best suited for:

“Most people who are buying $500,000 policies are buying term coverage. These are people who generally have children, and/or have a need for a financial safety net because they have a mortgage or other set expenses….The key is to assess your financial responsibilities and how long you’d like to ensure financial support for your family.”

On how to assess whether $500,000 in life insurance coverage is adequate for your needs:

“To determine if a $500,000 policy is the right amount, I recommend starting with a simple needs analysis. This means looking at your current debts (like a mortgage, car loans or credit card balances) and ongoing financial needs (such as monthly bills, childcare or future college expenses). Add up these amounts, then think about how long you’d want your family to be supported financially if you were no longer around. You must also factor in your income and how many years you’d want it replaced. For example, if you earn $50,000 a year and want to replace your income for 10 years, a $500,000 policy may be appropriate. However, if you have fewer financial obligations or more savings and investments, you may not need as much coverage.”

Read the rest on MoneyGeek

To find out more about life insurance from Brad’s perspective, along with several helpful tips about purchasing the right plan, visit moneygeek.com. Ready to explore your next life insurance move? Give us a call to talk through all your options!