And how much life insurance coverage is enough?
On the list of topics that nobody enjoys talking about, insurance and mortality both rank pretty high. That makes life insurance an especially tough subject to tackle.
But talking about it with your family and your insurance agent now — before it’s too late — is an absolute necessity.
I consider life insurance to be the most important type of coverage we offer at AAA Washington. The benefit is peace of mind knowing the family is protected even in its darkest day with financial support while they grieve.
Carrying the proper amount of coverage is critical to avoid having to sell a home or postpone retirement. Even if you’re fortunate enough to receive life insurance from your workplace, it’s almost always far too little. Without your income, a life insurance payout of $50,000 or even $500,000 can be quickly exhausted by payments like a mortgage, car loan or school loans and tuition. We typically recommend a life insurance policy offering seven to 10 times someone’s yearly income, adjusted for their particular situation.
Special circumstances can make life insurance even more crucial. If you own a business with a partner, a life insurance policy equal in value to your half of the operation can make the transfer of ownership much less complicated upon your death. If you have valuable real estate or other assets that could cause your family to face huge estate tax burdens, a life insurance policy will let them enjoy everything you worked so hard to provide.
Life insurance is at the very heart of what we try to provide to AAA members: peace of mind and protection against life’s tough moments, whether you’re on the road, at home or on an adventure. Take a little time today to chat with an agent about how a policy can be tailored to your needs — and those of your family.