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Picking out the right life insurance policy for your situation can vary, in Burlington, North Carolina. Depending on your goals, current income level and your ability to afford additional protection at the time you seek an insurance policy, the amount of coverage that you need or may prefer to purchase can vary.
Current Income
As a general rule, it is best to purchase your term life insurance policy based on your current income level. If you are not sure about the appropriate amount for your financial situation, then estimate your needs at roughly 10 times your current annual salary. If you do not have financial obligations like a family or debts, then you may not need as much coverage.
Although the situation will dictate the amount of coverage that you need, in most cases it is bested on your current income level and not on future earnings.
Exceptions
In most cases, the amount of coverage that you purchase in a term life policy is based on your current income level. However, if you can reasonably expect a significant increase in your salary, then you may purchase your policy based on your future earnings.
Reasonable expectations of a salary increase are based on probability. For example, a medical student who is finishing the last year of residency can reasonably expect to see a significant increase in annual income within a year or two.
Obtaining an appropriate amount of life insurance is an important part of protecting your loved ones from facing difficult financial situations if you are not able to add your income to the family. The process of selecting the right amount of coverage can vary, but in most cases it is based on your current income level. Contact us to talk to an independent agent for more details about finding the right policy for your financial goals.