You have to love those one liners that just go on and on. I was always especially fond of the first President Bush’s “Read my lips” line. If Barbara Bush is anything like my wife she is probably still giving him a bad time over that.
Well, now that I am completely off subject, what I really wanted to talk about is one of the ways to determine how much life insurance is the right amount. For many people in these challenging economic times the right amount of insurance may have more to do with budget than death benefit. The premium you pay for your life insurance needs to be budgetable, comfortable and sustainable. You should never, ever let a life insurance agent talk you into paying more than you what you know is bomb proof.
Frankly that is one of the things that I personally dislike about whole life insurance and the agents that think product is more important than death benefit or sustainability. I mean if you are filthy rich and want to blow the money, no harm done. But if you are Mr or Mrs Average American, being talked into something that is over your budget or being talked into stretching your budget until it hurts is a recipe for disaster and the only winner will be the dirt ball agent who got paid commission while you were able to strain to keep it in force.
I need to be fair though. Even term life agents can be guilty of pushing clients into a price range that won’t stay together. You just have to be firm about your budget. A good independent agent will figure out the maximum benefit you can buy for that amount and won’t try to talk you into bells and whistles that add rapidly to the price.
I recently worked with a couple from church who had never had life insurance. They live paycheck to paycheck and asked my advice. I suggested starting small and affordable with a term insurance policy that would give them far more than they had ever had and would stay in force because it didn’t strain their budget. Something is always better than nothing and if you stretch your budget, it will break and nothing is exactly what you will have in force.
Bottom line. If you have a household budget, you know what you can afford. If you are willing to give something up in order to purchase more life insurance, make sure you give it up. If you don’t have a budget, get one together and stick to it and don’t let anyone talk you out of it. And make priorities in your life. A brand new car won’t do squat for your widow and children, especially if you’re making payments on it. Consider a used car and a larger life insurance policy.