How to Choose a Death Benefit
How do I choose the best life insurance & death benefit for my family? That is the question most people do not have an answer to.
While most American families have some kind of life insurance, not everyone gets what they need to cover their expenses.
The Expenses
Oftentimes, these are the expenses a regular family is confronted with upon death:
- Medical costs
- Funeral costs
- Probate costs
- Standard of living maintenance / Lost income replacement
- Mortgage / Debt
- Child care and education
The Insurance Coverage
All families have different needs, and depending on the family, those needs may continue on varying durations.
Rule of Thumb
There is no easy way to know this, so I’ll just say it. A good death benefit takes approximately seven times one’s annual salary, that’s if totally debt-free. For the rest of us, it is between 8-15 times the annual income.
Capital Needs Approach
The capital needs approach is the approach used by our online calculator. It is simply the value of present assets against that of current and future needs.
Human Life Value/Income Replacement Approach
Any life insurance policy could not compare to the worth of a human life, however a death of a love one could financially burden a family, and a good death benefit can substitute for the future financial earnings a deceased love one could have made. As a matter of fact, it could also help the families of a non-wage-earner who passed away. Taking care of the children and maintaining the family’s standard of living could become heavy burden.
Life Insurance Providers
Life Insurance by State
