Chemical engineers know about many important topics, but life insurance might not be one of them. Fortunately, you can easily learn the basics about life insurance. Here are five things you should know:
It’s all about reducing risk
As a chemical engineer, you’re aware of the importance of minimizing risk at work. You have to consider “what if” scenarios and take necessary steps to avoid bad outcomes.
Life insurance works in a similar way. While it may not be possible to completely eliminate all risk, life insurance is a contingency plan in case things go terribly wrong.
Bottom Line: If you should lose your life, life insurance can provide a source of income to support your family.
Focus on your needs – and your key milestones
It’s only logical: a young, healthy, single chemical engineer with no children has different life insurance needs than a middle-aged married engineer with three kids. When you consider how much life insurance to buy, it’s important to first consider who that money will support.
That’s why milestones are critical. When you get married or have a child, your life insurance needs change suddenly. That’s why you should re-evaluate your life insurance needs with every major milestone. This includes planning for your children’s college education and your spouse’s retirement.
Similarly, as your salary increases, you may want to increase your life insurance so that your family can keep the same standard of living they had prior to your death.
Your employer life insurance is probably not enough – and has a catch
The life insurance provided as an employee benefit is usually relatively small — typically one to two times an employee’s annual salary. That might be acceptable if you’re a young, unmarried engineer with no children, but it’s unlikely to be sufficient if you’re married or have children to support.
There’s also a catch with employer life insurance coverage: if you change jobs, the coverage usually doesn’t go with you. When shopping, look for coverage that’s “portable,” meaning it will travel with you from one job to another.
Do proper research
If you’re like most engineers, you’re probably good at research. So you should put those skills to use to learn more about the different types of life insurance products, and do some research on life insurance companies.
Don’t make decisions entirely on price. Choose reputable, financially stable life insurance companies so that the company will still be there when your family needs them.
Be smart — don’t over spend
With some smart shopping, you may be able to save money on the life insurance you purchase.
As an AIChE member, you can shop through AIChE Member Insurance Solutions, which offers life insurance plans for various needs and budgets at exclusive member-only rates.