Life Insurance in Kansas
Life insurance is a significant investment when you want to provide financial security for your family. Should one or more earners die, a policy provides a cash benefit. Depending on the level of coverage selected, the benefit can replace income for many years and help your family settle outstanding debt. DJ Kauffman Agency Inc. helps Kansas residents in Hutchinson, KS and beyond determine the appropriate level of coverage.
What is the difference between term and whole life insurance?
Term life coverage is generally cheaper than a whole life policy, but there are trade-offs for the reduced costs. The policy costs a set amount per month for a specified time period. If the insured dies during this time range, the defined benefit is paid to the beneficiary. After the period passes, the policy expires. The insured is no longer covered, and no cash benefit is paid.
Whole life coverage does not have an expiration date. As long as you pay, the policy stays active. Over time, some policies develop a "cash value" that continues to grow. When enough value accrues, you can take out a loan using the value as collateral.
How much life insurance do I need?
Many different formulas exist to assign a dollar value to individual life insurance coverage. The most common estimate is to multiply your annual income by 10. However, this formula does not take into account families with a high level of debt, several kids who need to go to college, or other unique situations.
The second rule of thumb is to add your debt, including potential funeral costs, future necessities, and the debt remaining on a home or car loans. Then, consider the number of years until your family is independent, such as the year your last child graduates from college or a spouse reaches retirement age. Multiply the total number of years by your annual salary. Add this number to your debt total and future needs to arrive at an estimate.
Seem complex? It is, and there could still be additional issues you need to examine. Does a family member have a disability? Will an elderly parent require care? Does your spouse work in a high-turnover industry where the second loss of income is possible?
A Kansas agent can help you answer these crucial questions. Stop by our office in Hutchinson, KS or call the DJ Kauffman Agency Inc. today to review your life insurance options.