How Much Life Insurance Do I Need?

One of the first steps in buying life insurance is determining how much life insurance you need. Life insurance is a simple concept — you buy a policy that pays to your beneficiary or beneficiaries when you die — but the decisions of what kind life insurance to purchase, how much of a death benefit and how much you pay are extremely complex.

Why Do People Buy Life Insurance?

Covering funeral and final expenses is the No. 1 reason people buy life insurance, according to a 2020 survey by LIMRA and Life Happens, both industry-funded groups. (People could choose multiple reasons.)

Too many Americans live with a life insurance coverage gap, leaving their loved ones’ financial security at risk. According to LIMRA, here are some of the other reasons people choose to have life insurance:

•  Burial/Final expenses: 84%

•  Supplement retirement income: 57%

•  Transfer wealth: 66%

•  Help payoff mortgage: 50%

•  Replace lost wages/income: 62%

•  Home expenses: 48%

•  Tax advantaged investment: 45%

•  Estate taxes: 43%

•  Pay for college: 37%

•  Business purposes: 28%

•  Charitable gift: 27%

The need to provide loved ones with financial security has heightened since the pandemic. A recent LIMRA survey found that 44% of households said they would face financial hardship within six months if the primary wage earner were to die prematurely. For 28% of households, financial hardship would hit within one month.

Frequently Asked Questions About Life Insurance

Bancorp’s insurance experts are available to provide you with a free review and consultation.  Contact Us – Bancorp Insurance Call 800-452-6826

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our agents.

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November 2, 2023.

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November 2, 2023.

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