Is one Life Insurance plan enough?
It depends on what you’re getting it for. When you’re looking at life insurance policies it’s important to have a “goal” in mind, otherwise there are way too many choices to choose from.
The two most common reasons to get a life insurance policy are: 1) to cover the loss of income your family will encounter if you pass, and 2) to cover final expenses (such as a funeral). So, should you have more than one?
If you want two because the one you have isn’t covering you enough then you’re better off just changing that original policy into a better one, reason being: you save more when you buy in bulk.
So, if you don’t think your current policy is enough to cover your family should you pass (the general rule is to aim for 5x your annual income), then it makes sense to either upgrade that one or get a new one. There are of course some exceptions to this rule, like if you only have one policy and it’s through work and fully covered by your employer. In that case, you should keep that policy because it comes at no cost to you, and you can consider a second one that satisfies the same purpose.
If you’re only looking to be covered for final expenses, then usually it is much better just to have one policy that handles that, otherwise, you’re adding additional cost to something that you should just upgrade. Most people shoot for around $50,000 of coverage for final expenses, obviously your needs may vary.
But what if you want both? This is when it might make sense to have two life insurance plans. The best plans for income replacement are “term” life insurance plans and you should find a term that lasts until around you plan to retire, because once you retire, you’ll most likely have a pension that will transfer to your beneficiary should something happen to you.
If you’re looking for final expenses coverage, then you’re looking for “whole life” insurance. These plans cover you for… well your whole life. They usually don’t offer coverages as high as term plans, but are effective at making sure your final wishes are paid for.
So, if you want both coverage to cover the loss of your income and coverage for final expenses, then that’s when we recommend you consider getting two plans.
Obviously, these differ from person to person and while this is general advice, it isn’t always the best call for everyone. Which is why we recommend you talk with a financial advisor or a life insurance specialist (book a call with ours by clicking here) in order to get the best advice.
Life insurance is a complicated subject, and it can often take a lot of work to just get started, unless you’re using a tool like Ethos. Ethos and SDPEBA partnered up a couple of years ago to make getting a tailored life insurance quote easy for San Diego City/County employees and retirees. The process is really simple and you can get a quote in as little as 10 minutes. Check out everything Ethos has to offer by clicking the link below.