Greensboro Life Insurance: When and Why to Buy More

There are many reasons you could probably come up with for buying life insurance. One of the more commonly cited is because a college friend, recently recruited into the insurance business is making his rounds pitching policies to all his friends and you happen to be one of them. In this case, you could say you didn't really buy life insurance as much as it was sold to you.

But whatever your motivation for taking the plunge - maybe you've recently married and want to provide financial stability protection for your spouse or you've just taken out a mortgage for a new home and don't want to leave that financial burden to your family in the event of your premature death - taking out a life insurance policy is always a selfless act.

The only real benefit you'll ever get as the named insured is the peace of mind of knowing you're looking after the welfare of your policy beneficiaries. In reality, life insurance could more aptly be termed "death insurance," as its main purpose is to pay out financial benefits at the time of death, which is money the insured will never see. One thing's for sure - everybody dies. This means every in-force life insurance policy will eventually pay out a death benefit to the insured's beneficiaries. The only unknown is when this will occur.

When and Why to Buy More

As in the previous example, buying your first policy from an old college buddy, the face value of such coverage is typically something small such as $10,000. In the event of your death early on, this may be just enough to cover your funeral costs, relieving your beneficiary of the financial hardship of having to take on these costs.

As time goes on, however, and you get married, have a couple of kids, take on a home mortgage, car payments, credit card debt and other financial obligations, the amount of money needed to settle your affairs in the event of an early, untimely death will be much greater. At each of these milestones, taking out additional life insurance coverage is something you must consider. If you were to die tomorrow, how much would it take to pay all your outstanding debts and provide sufficient income to keep your family financially secure and educate your children? This is the amount of life insurance you should be carrying right now.