Tips for Determining an Appropriate Level of Coverage
We all hope to work long, productive careers that allow us to retire with confidence and spend many years doing what we love. However, as physicians know better than anyone, a long life isn’t guaranteed, regardless of how healthy we may be. That’s why it’s important to plan for the unexpected by having a life insurance policy in place to protect your loved ones.
Even among physicians who understand the importance of having life insurance, a common question remains, “How much life insurance do I need?” The answer to this question depends on a number of factors.
1. Your income– If you are your family’s primary breadwinner, you may need more life insurance than someone who is not. That’s because your loved ones likely depend on your income to cover most of their living expenses, such as housing, utilities, groceries and other bills.
2. Your debt– If you have significant debt such as student loans, a mortgage, auto loans, etc., you may need more life insurance to ensure your family can pay off those obligations should you die unexpectedly.
3. Your dependents – You may need more life insurance if you have children or other dependents who rely on your earnings. Your life insurance can help pay for childcare, education expenses, kids’ camps and activities, and other costs of raising a family.
4. Your age – The younger you are when you purchase life insurance, the lower your premiums will likely be. This means that if you’re a young physician, it may be wise to purchase a larger policy that will provide more protection for your family in the long run.
In addition, young physicians tend to have more student debt, face additional childcare expenses and are often more likely to be the primary breadwinner as their spouse stays home to care for young children. All of these factors make it likely that you will need additional life insurance to protect your loved ones.
How to Calculate Your Life Insurance Needs
Following are several methods that may be helpful in calculating how much life insurance you may need.
While all these approaches are helpful in estimating the amount of life insurance coverage you may need, the best way to ensure an appropriate amount of coverage is by working with an experienced insurance professional.
At Scureman and Associates, we specialize in helping physicians identify and implement a wide range of insurance policies specifically designed to address their unique risks. If you could use some help determining how much life insurance you need, give us a call. We look forward to working with you.