Two hundred thousand dollars of life insurance may seem like a lot, but this amount of coverage may not be nearly sufficient to maintain the current level of family living in the event of the death of a wage-earning member. By determining family net worth, loss of income, other income resources available as well as desired future income for heirs, an accurate financial total may be estimated. The minimum goal would be to provide bare subsistence for dependents. A realistic compromise would be to provide enough money to allow the family to continue its current level of living in the event of the death of an income earner, after planned adjustments in the budget and use of other resources have been made. To try to provide more could mean the family is putting too much emphasis on providing financial security in the event of a catastrophe and not allowing sufficient financial resources in the budget for current needs.
Families often fail to take advantage of possible ways to save in purchasing life insurance.
By careful budgeting, consumers could pay insurance premiums yearly, which is less expensive than paying on a monthly or quarterly basis. Consider taking advantage of group insurance plans, which are less costly than individual insurance plans. When selecting life insurance, there are other facts to consider. Younger consumers may purchase large amounts of life insurance because the rates are low, even though there is little need for the coverage. Buying large amounts of life insurance for a child does not ensure family economic stability when the major income earner in the family is under-insured.