Reader question:

When I compare rates for smoker life insurance coverage, how do I know how much coverage to get?

Lucy

Great question, Lucy.

Before you compare rates for smoker life insurance coverage, you should sit down in front of a piece of paper with a pen in your hand and figure out what the right amount of coverage is for you. This is important, because if you choose to little you could leave your family in the lurch, but if you choose too much you could waste your money on overpaying for insurance.

You should find, first of all, what costs will come up immediately after your death. This includes funeral expenses, travel costs, and all of those related things. Add these to other expenses which show up in the long term, like college tuition for your kids, paying off your mortgage, and keeping your family afloat for a few years as they adjust to life without you. Then you take from that the resources which will remain after your death, such as liquid assets, your spouse’s income, stock options, savings, and all of that, and the number you come up with is the amount of coverage you should purchase.

take care,

Fashun