Families – especially those with young children – are advised to remember the importance of life insurance when planning their long-term financial needs.
Experts typically recommend that adults with children take out a life insurance policy equivalent to 10 times their annual salary. Additional coverage should be considered if any other expenses like higher education or aid for older dependents are anticipated. And even those who do not have children or dependents may still consider a policy because it would allow them to leave behind charitable contributions.
A column in South Dakota’s Rapid City Journal advises young families to invest in a term life insurance policy because of the combined financial protection and budget savings this would provide.
Certified financial planner Rick Kahler writes that when factoring in expenses like day care, college and braces, parents with young children may want to consider carrying a policy between 500,000 and one million dollars.
Kahler notes that a one million dollar, 20-year term life policy could cost a healthy young parent as little as 60 dollars per month. He also says you can try to further protect your interests by going with the longest term policy available.