092721 How much life insurance do I need?

Everybody needs a different amount of life insurance based on

their individual situation. But it basically comes down to how

much money your loved ones would need to remain on firm

financial ground if your earnings were no longer in the picture.

To get started, it helps to consider a few questions like…

* Who do I want to protect?

Common answers include a spouse

and children, but your list may also include siblings, aging

parents and more.

* How long would they need financial support?

Consider the ages of everyone who depends on your earnings.

* Is anyone disabled or have other special needs?

It’s important to remember that some people may need lifelong

support.

* How much debt do I have?

You’ll want more coverage if you have a mortgage, auto payments,

credit card debt and other outstanding loans.

* How much savings do I have?

Factor in all of your savings and investments and how liquid they

are… some investments like real estate cannot instantaneously be

converted into needed cash.

* Were you planning on contributing to a child (or children’s)

college education?

If so, you’ll want to up your coverage level.

* Will my spouse need help with funding his or her retirement?

If so, more coverage is needed than if he or she is fully funding his

or her own retirement.

Three Easy Ways to Estimate Your Need

There’s no way to know the exact dollar amount your loved ones

would need if you were to pass away.

But there are three easy ways to get an estimate of what that

amount would be. (Keep in mind that experts recommend

erring on the side of caution and buying a little more life

insurance than you think you may need.)

Calculation (1)

One of the simplest ways to get a rough idea of how much life

insurance to buy is to multiply your gross (a.k.a. before tax)

income by 10 to 15. Another popular formula recommends

adding $100,000 to that amount for each child’s college

education expenses.

Calculation (2)

Another way to get a ballpark figure of how much life

insurance to buy is to calculate the following…

* Add up the immediate, ongoing and future expenses your

family or loved ones would incur if you were to pass away.

That could mean everything from funeral costs to rent or

mortgage to college tuition.

* Add up the financial resources your loved ones already have.

That could mean a spouse’s income, savings, investments and

life insurance that are already in place.

* Subtract your financial resources from the anticipated expenses.

The difference between the two numbers is the approximate life

insurance to buy.

Calculation (3)

Perhaps nothing is easier than a life insurance calculator, which

is why we developed our Life Insurance Needs Calculator.

Just answer a few questions to get an idea of how much life

insurance to buy.

https://lifehappens.org/life-insurance-needs-calculator/

Comments

022823 The 9 Benefits of Whole Life Insurance...

(1) Provide for Loved Ones… It’s the basic need everyone thinks about. You have a young family. You are the major breadwinner. Something happens to you. How is Your family supposed to make ends meet? It’s a form of protection. Peace of mind. (2) Key Man Insurance… You and your partner own a business. It’s grown. Many employees Depend on you. If something happens to your partner, it’s likely their Spouse or family will inherit their share of the business. Cash would Be a lot more useful to them. Life insurance on both partners can Provide the cash to buy out heirs and keep the business intact. (3) Emergency Loans… Hopefully your client lives a long life. The whole life policy accumulates Cash value, eventually growing to the full face value, or beyond. Many Policies allow you to borrow money against the cash value. You would pay interest. (4) Funding Estate Taxes… Your client owns a farm. I...

090921 Those Dying From Covid-19 Are Least Likely to Own Life Insurance...

Many companies have sharply reduced estimates of their exposure, as measured by payouts per 100,000 U.S. fatalities As the number of U.S. corona virus deaths surpasses 200,000, public-health experts point to a series of missteps and miscalculations in the country's response. Here’s a look back at how the U.S. became the center of the global pandemic. Sept. 28, 2020 5:30 am ET U.S. life insurers are paying out far fewer Covid-19 death claims than initially expected, largely because the virus is disproportionately killing people with little to no insurance. In the past few weeks, many life-insurance companies have sharply reduced estimates of their exposure, as measured by payouts per 100,000 U.S. Covid-19 fatalities. Estimates have come down by an average of 40% to 50%, according to Credit Suisse stock analyst Andrew Kligerman. Driving the rapid reduction in exposure are two groups… older Americans and minoriti...

080822 Less Common Life Insurance Needs

On top of the most common reasons for buying life insurance, It can help cover some less common needs. These could include… *Insuring Children Buying a policy on a child can ensure that the family will financially Survive the loss of the child, but keep in mind that such a loss is Fairly unlikely. It can also ensure the child’s ability to qualify for life Insurance in the future. That could be helpful in the case of a health Diagnosis that might make it harder to pass the underwriting process. *Replacing Retirement Benefits Life insurance is often marketed as income replacement for an Insured person during their working years, but some retirees may Choose to keep theirs after leaving work. It can be used to replace The loss of any retirement income for their spouse or any dependents. *Investment Permanent life insurance can provide you with a potential income Source. You can access your cash value once it has buil...

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