Life insurance is a prickly issue, and deciding just how much you need and which policy to choose is easier said than done. The fact of the matter is that you need a good policy in place to act as a safety net because it could be the difference between moving on and moving out of the house they can no longer afford (cue sad movie score).
Just why do we deem Life Insurance important? There are very few among us (and they are the blessed ones) who do not need to pay off bills, worry about EMI’s and not fret over that next mortgage payment or credit card due date looming large. And that’s before you can even begin to account for the essentials you need that slowly eat away at your income, like utility payments and food. And so, when you live almost from cheque to cheque with little to show by way of savings, imagine now putting your loved ones through the wringer without any source of income on the horizon, especially if you’re the sole breadwinner.
And like the domino effect, the bills just keep on piling up. If you’re in and out of the hospital and have any of those bills to square, that too heaps on the agony. It’s like a mountain, your personal Everest, and the summit just never 
appears in sight no matter how much you scale it and pay your debts. Either way you look at it, your family will have to eat into savings or start cutting more corners than you can count on one hand in order to stay afloat. It’s not a pretty scenario to visualize, and it’s a hard question that needs to be asked; how will everyone get by after you’re gone? Have you provided enough for them to live comfortably and get on with things?
There are plain Jane policies and more nuanced ones you can pick with variable rates and everything you can ask for from an insurance provider. Before launching yourself headfirst into a policy, you first tot up the numbers and decide how much you need realistically. You can follow one of several “rule of thumb” guidelines that are looked at universally but the critical components in your decisions should be your income, the number of dependents, the amount of debt you will leave behind and the lifestyle needs that have to be maintained. The fact of the matter is that you need to take these into account as also what you want it to do for you. Do you need a policy that only takes cares of that mortgage or helps with final expenses and provides financial support too? If it’s the latter, that’ll obviously cost you extra so you have to figure these into your plans as well.
If the thought of listing out every single need of yours fazes you somehow, turn to the innumerable life insurance calculators available online to get a more accurate figure close at hand. These calculators ask you specific questions, like whether yours is a single or double income household, and then spit out a coverage figure. One of the burning questions though is whether you should go with term or life insurance. In all honesty, the answer to that one question boils down to you, as it should. If you’re younger and short on money for premiums, term life insurance could be the thing for you. They are reasonable to begin with but with time will go up and there is a real risk that you might not re-qualify for a renewal on your policy if your health deteriorates in the future.
Conversely, if you’re more comfortable locking in a premium figure for life, a permanent and whole life policy might be what you need. The premium payments are more, well, premium to begin with but it will stay at that figure for years to come and you will not need to re-qualify cyclically as you do for term insurance. Regardless of your choice, life insurance in itself is a must for you and your loved ones and it’s the ultimate safety net to have in the face of any outcome.
