According to Kenneth Sutton, USAA’s life insurance product management director, you only need life insurance if you love someone — or think you ever will in the future.
Life insurance is one way you can help protect them — for the day you might not be there.
Do I need life insurance? According to Kenneth Sutton, USAA’s life insurance product management director, you only need life insurance if you love someone — or think you ever will in the future. Realistically speaking, that’s most of us. Life insurance can provide for our survivors, keeping a roof over their heads, clothing on their backs and food on the table.
How much life insurance do I need? Look at your current situation. The first thing you’ll want your insurance to do is take care of housing for your loved ones. Paying off a mortgage or providing years of rent can go a long way to helping ensure financial stability for survivors. Then think about income replacement. A good rule of thumb says that life insurance should buy time so that a surviving spouse can focus on the family until the last child reaches age 25. At a minimum, though, you should try to provide five or 10 years’ worth of salary so a spouse can get things in order and attain necessary education or job training. There are many great tools, including the USAA Life Insurance Needs Calculator¹, to help you evaluate your requirements. You also could talk with a USAA financial advisor.
What kind do I need? Sutton suggests first addressing your loved ones’ current requirements. The majority of your life insurance should probably be short term, to provide for your survivors’ known needs. Permanent insurance can take care of long-term needs but is less of a priority. A life insurance professional can help you determine the blend.
Why do I need other life insurance when I already have it through my employer?Employer plans can be a great benefit, but they have disadvantages. First, you don’t own your employer’s plan, so it can disappear if you lose your job. Group life insurance, including Servicemembers Group Life Insurance (SGLI), can be nice, but you should consider it an addition to the plan you own and control. Don’t be reliant on it because it could go away. Also, getting your own insurance now — when you’re as young and healthy as you’ll ever be — can lock in good rates you’ll not likely see again.