You Are Worth $1,000,000
Did you just read the title of this blog and laugh out loud?
It probably surprises you as much as it does our clients when we tell them they need $1,000,000 of term life insurance. When you factor the income you earn and what your family would miss out on if you pass away prematurely, then add in the time value of money, you might be worth more than you think.
We use a calculator called “Value of Human Life” (if you’re a vampire, we have to tweak the numbers a bit) just to show you how much you’ll earn in your lifetime. For example, a 35 year old working to age 65, earning $50,000, factoring in inflation, is worth $2,378,770.
So while you’re living, you earn that money and spend/invest it as you choose. But what happens if you pass away prematurely? Suddenly your family doesn’t have the money you used to earn.
This is where life insurance plays a role in your family’s financial plan. We can do all the planning we want, but if the money stops coming in, the plan crumbles.
Life insurance ensures the lost income is replaced. Life insurance pays off debts. Life insurance can even play other roles like pay for final expenses, pay the final tax bill, and pay for education costs for children and more! The proceeds can be used in whichever manner you see fit that best suits your family at time.
Is it fun to think about life insurance? No. Is it important to think about? Heck yes. Life insurance can literally save financial lives.
Your next concern might be the cost of getting $1,000,000 coverage of life insurance. For most 30-40 year olds, you’re looking in the $40-$50 a month price range. That’s comparable to the price of a gym membership and much cheaper than a cellphone bill!
Do you have enough coverage?