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The Right Protection

From your income to your children’s future education, here’s what to consider when you buy life insurance.

by David Scales, Jr., State Farm Insurance Agent

How much life insurance do I need? Is the life insurance I have through work enough? I bought life insurance a long time ago, do I need more now? These are common questions people have about life insurance, and the answers are different for everyone.

As an individual, you have your own unique needs and dreams for the future, and you have your own unique family situation. Helen Lee, State Farm® agent in Buena Park, California, helps a lot of people with these kinds of questions, and she’s here to offer some good insights into how to figure out your unique life insurance needs.

What to Look At: Figuring out how much life insurance you might need starts with looking at what and who you want to protect, and that often depends on what life stage you’re in.

• If you’re newly married or a young parent, your income may be what you primarily need to protect. So if something happened to you, you could leave enough behind to help your spouse or family replace the lost income for a certain amount of time.

• If your family is growing and you’ve purchased or upgraded your home, you may need to add additional coverage for some of your bigger assets. You might also be thinking about protecting your children’s future education needs.

• If you’re going through a divorce, there are several factors to consider, especially if you have children.

• If you’re nearing retirement, you may start thinking about what your spouse would need to live comfortably if they live longer than you.

Lee helps customers look at all of these factors and more. “We look at their income, their family size, their home’s value, their debt, their business if they own one. If they have children, we factor in everything from basic costs like food and clothes, to future costs like a college education. It comes down to how much your family might need, and for how long, to continue to live comfortably, if you were no longer there to help support them.”

Is My Current Coverage Enough? Many people who have life insurance through work assume that will be plenty for their family to live on.

But as Lee puts it, “Many people don’t do a needs analysis with their work coverage. They see the number and feel secure with it, but they’ve never sat down and looked at the numbers to see if they’re even in the ballpark. For some people, it is enough, but for many people I’ve talked to, they find they need more.”

What If I Can’t Afford It? So what if you’ve done an analysis of your needs, only to find out the premium isn’t something you’re able to afford right now? Lee describes it as a balance, and an ever-evolving conversation.

“When we calculate proper coverage, we balance their budget with their needs. Budget is very important, so we start with helping customers find a solution that makes the most sense for them based on what they feel they can afford, while still feeling secure in their protection. We look at term versus whole life, things like that.

“Then, as their income and liability grow over time, they have more to protect but also more ability to afford more coverage. My team and I follow up with these customers on a regular basis so we can help them stay updated.” n

For help figuring out your own life insurance needs and to talk through your options, talk to your local State Farm agent today.