As a working single adult, you might not even consider life insurance as a necessity in your life, if you even think of it at all. Once you get married, you may think about it to some degree, considering it, weighing your options. Many married couples opt for an insurance policy as soon as they are legally man and wife, while others take their time or don’t even bother with coverage at all.
However, once you have children, everything changes—life insurance becomes a must, despite what you may think about it. Even though nobody likes to think about death at great length, you have to take the financial protection of your loved ones into consideration.
Consider the situation with a one-income family of three children being cared for by a stay-at-home mom, where the father unexpectedly dies—and they have no life insurance plan whatsoever. This is not a situation in which you want to end up.
One of the great things about life insurance is that there many different options to choose from. For families, you can opt for family life insurance—which, like its name, is life insurance meant for families. What should you look for in a family life insurance company?
A life insurance agent will help you and guide you to make the right decision for you and your family, based on the future needs of your household should something untimely happen to you—taking into account how much money you currently make and what you provide for your family. A good policy ensures your family will be covered (financially) in the event of your premature death, and will help you come up with a reasonable plan and payment structure that works for your family.
For one-income families, the policy generally only covers the possible death of the breadwinner. However, if both partners contribute to the family’s income, then a good insurance agent should take that into account, thus recommending both income earners be covered. For dual-income families, ensuring sufficient coverage is essential.
However, many statistics and family life insurance companies report that most families in the U.S. don’t have enough life insurance to meet the financial needs of their family members in the event of a parent's or both parents death. Many customers also don't realize that as their families grow, they need to review their current coverage in order to determine if it's adequate to meet their needs—or if they require more.
Generally speaking, if you have children, it is recommended to get coverage the equivalent of eight or nine times the gross annual household income.
Check your policy if you’re not sure how much coverage you have (surprisingly, when asked, many families don’t even know how much coverage they have—they just know they have a bill to pay every month), and review it with your life insurance agent if you’re not sure it’s accurate or enough.