10 Simple Tips

To Know Before You Shop for Life Insurance



Are you prepared or underinsured? These 10 Simple Tips provide straight answers to frequently asked questions about life insurance, so you can make the best decision for you and those you care about.


1. If you have dependents — you need it

If you have children or people who depend on the money you earn, you need life insurance.  Life insurance lets those you care about keep on living as they would if you were still earning a paycheck. 


2. Life insurance can replace your paycheck if you aren’t there to earn it

60% of annual income times years to retirement gives you a reasonable estimate of the amount of life insurance to buy. This incorporates an estimate of your salary, assuming some normal raises over time, and adds the value of your employee benefits, like healthcare. Then it subtracts the effect of taxes, and costs associated with your lifestyle. 


3. Some life insurance is better than no life insurance

Some life insurance is better than no life insurance.  At minimum you may consider coverage that equals outstanding debt (including mortgage, car payments and student loans) + 5 years of annual salary. 


4. Life insurance can be less expensive than you think

Many people think life insurance is much more expensive than it can be.  In fact, many people can get term coverage from a quality company for a surprisingly low price.  For example, the monthly premium for a 35-year old male purchasing the MICPA 10-year level term life insurance plan would be $31.25.  Life insurance does get more expensive as you get older. 


5. Life insurance is a smart financial move

To get the amount of coverage we recommend, you can expect to pay about 1–2% of your annual salary on the annual cost of term life insurance.


6. Make sure you know how much life insurance you get at work

Many people assume they have more coverage at work than they really do. We recommend you look carefully at the amount of coverage you have, then buy additional life insurance to fill any gap.  

7. Life insurance needs change over time

Life changes like new family members, a new job, a move or even a raise at work calls for an evaluation of your life insurance.  Review your protection every year during the benefits enrollment period at work. 


8. Term insurance is an easy, and cost-effective, way to get started

It is an easy and cost-effective way to get protection in the short run. Because term insurance runs out at the end of the term, use it to protect needs that you can anticipate — like paying off a mortgage or funding college for your children. 


9. The financial strength and reputation of the company is important

Having life insurance with a company that has strong financials and a great reputation are important to ensure guarantees are kept. 


10. There is no substitute for good advice

The more you know about life insurance basics, the more control you have over deciding what’s right for you. To get the right answers, some people prefer talking to a trained financial professional, while others favor doing research online. Whatever way works best for you, taking action to protect your family with the right amount of life insurance coverage is an important part of your lifetime financial plan.


Have more questions?  

Contact a trusted MICPA insurance representative at the Paul Goebel Group today! 

Visit or call us at 800-632-4591 ext. 5602 or 5611 


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Source: MICPA

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