What is the worst scenario you can think of us the main provider for your family? I don’t know about you, but for me it is dying unexpectedly and my family facing massive debt and little to no income coming in to provide for them.
As a pilot, you have enormous earning potential but if you are just starting out, it is reasonable to assume you are not yet in an ideal financial position.
In most cases, you are just coming out of the military or recently graduated and staring down significant debt. A car, home, children, credit card debt, just to name a few, can cause undue stress to the family budget.
Even if you land a high-paying commercial job, you need to dig yourself out of that financial hole before you can start to put significant money into retirement accounts.
So, what options does a young pilot have to ensure financial stability to his or her family? In two simple words…life insurance. And, yes, we realize that most companies will have some sort of coverage for employees, but that coverage may not be enough to cover your current finances.
You want to make sure that your wife or husband as well as the kids are well taken care, as they are going to have enough to deal with in your passing.
How to Decide on Your Coverage Amount
In most case, broker and direct agent sites will provide some type of financial calculator that will enable you to figure out the proper amount of coverage to secure.
Keep in mind that the more coverage desired and the type of insurance will escalate the premiums.
For this reason, it is always best to consult with an agent or broker prior to securing the life insurance to put a plan together to ensure proper coverage based on your current and future needs.
While your agent will probably discuss factors, we wanted to get you started and have put together some current and future costs that may need to covered and should be considered when locking in the value of your policy:
Mortgage and Car Payments – look at your current situation to consider how far into the future these payments will be needed. Remember, today’s pound or euro will far likely be worth much less in the future, so plan accordingly.
Education – your son or daughter may be a new-born, but future educational costs should be considered when securing a policy. You may also want to consider costs of spousal education, as he or she will need to have a profession (assuming that he or she does not already have one) upon your passing.
Current Credit Card Debt – debt like this is not something you want hanging over your family, so make sure they are able to pay off this debt in full with the value of the policy.
Income – if you are the only or primary wage earner, future earnings should also be considered in the policy. This may be the only source of income your wife or husband will have in the future, so the policy value will need to reflect this
Burial Costs – this is often something that is overlooked when creating a policy, but realize burial costs are quite significant. If your employer has a policy in place, you may be able to designate that policy to cover these costs first and then decide on a secondary policy for the rest of your family’s financial needs. Otherwise, include these costs into the overall value of the policy.