If you are a young adult and you are considering getting a life insurance policy, there are some things you should consider when deciding how much coverage you need. Since it's just you in your life that you're responsible for you may not be concerned about leaving a bunch of money behind, but there are some things to consider so you don't burden people if something happens to. Here are a few things to budget for with your life insurance when you're planning for the unexpected.
What Debt Are You Leaving Behind?
Do you have a loan on an automobile, for your education, or do you own a home? If you have any type of debt and you think it's going to be a hassle for someone else like your future spouse to deal with it, have enough life insurance to cover the debts. This makes it easier for them to sell whatever they need to, or to wipe the debts away.
Estimated Funeral Expenses
What type of funeral would you want and how much would you want to be spent. If you don't want to be buried you want to be cremated, or if you already know what you think you would need, sit down with a funeral director and get a cost estimate. You can leave a plan out so your parents or someone else doesn't go overboard or do what you don't want, and you just let someone know you have it prearranged with the funeral director. Add this amount into your life insurance budget.
Who Would You Want to Leave Money Too?
Is there someone that you would want to leave money to, or a person that you would give money to if you could? That is the person who should be the beneficiary on your life insurance policy. They will get any of the cash that is left over for their own use and can manage things for you.
No one wants to sit around and think about what is going to happen when they are gone, but being a responsible adult and planning ahead of time is going to save a lot of stress and headaches if something does happen. Talk with a funeral director (such as one from Louis Suburban Chapel Inc.) and with a life insurance professional to see what type of plans are going to be the most accommodating for your needs, and to find out what you can afford to pay.