Home Can I have more than one Life Insurance?
Do you already have life insurance? Yea? Very good! This product guarantees more protection for you, who you love.
But do you wonder if you could have multiple life insurance policies? More importantly, should you? Some professionals not only recommend but also have different policies.
Why should I take out one more life insurance policy?
There are policies that can be used as security for old age and not just for use after the death of the insured. Life insurance can be used for both temporary and permanent needs. It is important to understand what needs each policy can be applied to, and, in this way, you can use insurance as an investment for the future: yours and your family’s.
Combining the different policies to your benefit is recommended and practiced by professionals in the field. But before you take out the policies, keep in mind that you get a discount on the price based on face value. In other words, interest for a million-dollar face amount life insurance policy should be cheaper than two policies worth half a million each.
Calculating your family’s needs
A guideline on how much life insurance you would need is to calculate ten times your annual income. Of course, you don’t have to follow the guideline for the letter as it depends on your income. If you have debts, if you own a business, the number of children, if there is already a will and inheritance document, etc.
To get to your specific number for how much life insurance you should have, you’ll need to calculate how much your family will need if you die. Think of this as the formula: take out your family’s debt obligations and future cash needs by subtracting the assets you have.
Debt obligations would be things like mortgages and other debt. Also included are outstanding credit cards, personal loans, or auto loan debts. These costs must be considered from now on.
In addition, there are debt obligations that may be unknown. You will need to estimate future education costs and account for final expenses. Such as medical expenses, funeral costs, and liquidation of property you leave behind.
Another thing to think about is the value that your family needs and determine the cash flow that will have to be maintained by them in the future.
Calculate Based on your income
This is where your income – which your family will lose after your death – comes in. The higher your income, the greater your responsibilities. Consequently, the greater the amount of insurance you will need to cover your loss.
Here’s an example: you earn 100,000 reais a year, you’re married, and you have two children, a 5-year-old and a 3-year-old. You and your wife owe $100,000 in a mortgage and have $15,000 in car and credit card debt.
You look for a 15-year life insurance policy option that will cover you until your youngest child completes all of high school.
Distributing the value across different policies requires a commitment and a lot of attention when making your own calculations. Your wife’s earnings, taxes, investment earnings, and inflation also play a role in choosing your insurance.
Consult the available options, and don’t forget that it’s important to protect your family and the people who depend on you.
Think carefully before making your decision to purchase more life insurance policies.
Make sure there are “living benefits” that protect against chronic, critical, and terminal illnesses as you age. Thus, life insurance becomes a useful product not only in the event of death. But the insured can take advantage of different coverages and assistance in life.
Thinking about life insurance in a more strategic way is beneficial and can help your entire family when they are going through a difficult time. You can make it easier by applying policies according to different benefit policies, including joining more family members.
So if you were still in doubt, take the opportunity to research the possibilities and ensure more stability for you by joining life insurance or adding more policies to your life insurance.