It is always difficult dealing with a salesperson, no matter what they are selling you. The built-in conflict of interest is the issue. Of course a car salesman thinks you should buy a car, a real estate agent thinks you should buy a house and a life insurance agent thinks you should buy more life insurance. However, buying a home and buying a car are a lot easier to wrap your head around than buying life insurance these days. It’s more complicated than just buying term policies with a death benefit. The truth is…it doesn’t need to be this difficult. Any product that seems too “exotic” or “complicated” is likely not as good as it sounds. These things are created by brilliant people and frequently designed to look good and be easy to sell, but will rarely make a difference in your financial life.
That said, everyone should have life insurance and most people actually do NOT have enough of it. The formula you should use is pretty simple. Just calculate how much money your family would need to make it if you were to die today. How much would your children need between now and adulthood? How about your spouse or others in your life? You should be able to come up with a number, but if you can at least come up with a timeframe, then you can just multiply that by your salary. For example, if your children were going to be in school another 10 years and you make $100,000 per year, then that’s $1,000,000 right there to replace your income. If you also had a $250,000 mortgage, then you would want a policy for at least $1,250,000. That way, your kids are taken care of money-wise as if you were still present and your mortgage is paid off.
Here is the article I read today that I wanted to share with you about the 10 things a life insurance salesman won’t tell you… Pay VERY close attention to numbers 4 and 5.