I'm young. Why do I need life insurance?
We can’t predict the future. That is why having insurance at every stage of life is important. Your loved ones can use the money for things like: paying off the mortgage and other debts, hiring someone to take care of the house and other household expenses, paying for child care, funding college tuition, paying your funeral costs, and other expenses.
Back to Top
I have group life insurance through work. Why would I need to buy more life insurance from SBLI?
Many people feel that the life insurance they have as an employee benefit is more than adequate. For some people, the amount may be sufficient but for others, it may not be enough. It really depends on your particular life situation. In addition, depending on the specifics of the group plan your employer offers, your employer could cancel your group coverage at any time; the insurance company providing the coverage could notify your employer that they will no longer be offering that coverage; and/or your coverage may end when you leave the company or if you become disabled. Also, with some group life insurance products, the price you pay changes. In most cases, it’s in your best interest to supplement your group life insurance policy with one that you own individually.
Back to Top
What do I need to think about when determining a life insurance amount?
By conducting a basic "needs-analysis", you can quickly determine how much life insurance is appropriate for you and your family. Depending on your life status, you may need a lot of life insurance to cover ongoing and future expenses, or you may need just enough to cover your final expenses.
Consider the following scenarios:
I am a stay-at-home parent.
At first glance, you may not think you need to purchase life insurance to cover your "wages". But the truth is, you have a job - and a difficult one, at that – that provides a form of compensation to your family. What you do 24/7 for your family has a cost associated with it, regardless of whether you earn a "paycheck" or not. If something were to happen to you, how would your family cover the costs associated with running the household? You will want to purchase enough life insurance to cover your family's ongoing expenses, as well as the costs associated with hiring a housecleaner, a babysitter or nanny, or even a cook, in addition to covering your final expenses.
I am a single parent.
You already know that raising a family on your own means that you have to be everything to everyone. This is why having affordable life insurance from SBLI is so important in order to preserve your family's quality of life now, as well as in the years to come. You will want to purchase enough life insurance to cover the day-to-day expenses, the mortgage, health insurance, car insurance, taxes, any debt that you hold, costs that are associated with running the household in your absence, providing for college, your final expenses, and other financial obligations that you hold.
My kids have grown, the house is empty and my mortgage is all paid up!
It's a great feeling knowing that you raised your kids and they are on their own. It is an even better feeling to know that your home is paid off and you can see retirement on the horizon. But even if you have planned for retirement, life often throws us curveballs that can alter even the best-laid plans. If you were to die prematurely, your retirement plan savings and social security may not be enough to cover living expenses for your surviving spouse. And even if you did save enough, you may unexpectedly experience an illness or other unforeseen expense that forces you to spend some of what you've saved. The last thing you would want is to lose your house and other assets that you worked so hard to earn. You will want to purchase enough life insurance to provide for your surviving spouse's future, as well as pay for your final expenses, taxes and other debts you may hold.
While you are alive, a portion of an SBLI whole life insurance policy's tax-deferred cash value can be used for your family's future. Click here for more information about SBLI's whole life insurance policies.
I am finally retired!
Congratulations! You worked hard and now you get to relax and enjoy all that you worked so hard to attain. You may have already protected your estate and other assets but need life insurance to pay for your final expenses and taxes. You will want to purchase enough life insurance to cover those costs as well as any other debts you may hold.
Additionally, a portion of an SBLI whole life insurance policy's cash value can be used for your family's future. Click here for more information about SBLI's whole life insurance policies.
I own my own business.
You may not immediately see the role that life insurance plays in business ownership, but the fact is, life insurance can protect your business in the event of your death, the death of one of your business partners or the death of one of your key employees. You will want to purchase enough life insurance to cover the loss of a key employee (also known as "Key Person Insurance"). You will also want to make sure that if you own your business with another partner or partners, they have the cash to fund a buy-sell agreement in the event of your death. You will want to purchase enough life insurance to cover these costs.
Back to Top
How much life insurance do I need?
You already know that no matter your age, marital status, or whether you have children or not, life insurance is an important component of your overall financial plan. So, how much life insurance do you need?
How much life insurance you will need depends on a number of factors. After you have completed a basic needs-analysis, you will have a good idea of what life stage you are in and what types of expenses and costs you will need to cover. While many people base their life insurance needs on their current income and debts, this approach does not always take enough into consideration.
For example, a common approach is to choose a life insurance amount as a factor of your gross income, such as two times your salary, five times your salary, etc., plus the amount of your outstanding mortgage and any debt you have. But if you stop there you may fall short of what you and your family actually needs. There are other factors to consider, including your lifestyle, financial goals, upcoming college tuition, taxes, costs associated with running the household, health insurance, and final expenses.
Additional items you need to consider:
- How many people are in your family, as well as their ages
- Other costs that will be incurred, such as babysitting, housecleaning, cooking
- College and other educational expenses
- How many years are left on your mortgage
- Final expenses incurred at the time of your death, which include taxes, legal fees and funeral costs
At SBLI, our licensed insurance representatives take the time to talk to you—at no charge and with no pressure—about your specific goals. We then provide a quote for exactly the amount of life insurance you may need at a very competitive and affordable price.
Back to Top
Why is my current income important?
When you speak with one of our representatives or if you request a quote, we will ask you about your current income. In order to appropriately determine the amount of insurance that you may need to protect your family, it is important that you tell your agent your household income. Since insurance is income replacement in the event of death, this is an important piece of information to determine the amount of insurance you may need.
Click for more information about each type of SBLI life insurance.
Back to Top
I know that I need coverage for myself. Do I need life insurance for my spouse, partner, and kids?
The short answer is yes. It doesn't matter whether your spouse takes home a paycheck or is a stay-at-home parent. Life insurance protection may be needed to cover your spouse or partner's current income, but also to cover daycare, housecleaning, cooking and other costs associated with the loss of a parent.
The best way to financially protect your family both now and in the future is by having adequate life insurance for each family member, and that also includes children. Providing your children or even your grandchildren, with their own life insurance policy gives them benefits above and beyond what your own life insurance policy offers them. SBLI offers life insurance specifically for these groups. For more information, visit Children's Life Insurance.
Back to Top
Once I purchase a life insurance policy, will I ever need more coverage?
You should view life insurance as "fluid", meaning it needs to change as you change. Chances are, when you first bought your SBLI life insurance policy, you were in a different life stage than you are currently. You may have purchased an amount of life insurance based upon your financial obligations at the time, but maybe things have changed. Perhaps you:
- Got married, divorced or became widowed
- Bought a house
- Had a child
- Changed jobs or started your own business
- Became the primary caretaker for an elderly relative
- Paid off your home
- Have children approaching college-age or already in college
- Find yourself closer to retirement
Whatever the life circumstance, chances are that you should review your current life insurance coverage to ensure that you are still appropriately insured.
Back to Top
When does my SBLI life insurance coverage begin?
Your coverage will take effect on the date it was approved by SBLI, subject to the payment of your first premium.
Back to Top