Skip to main content

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

Post a Comment

Popular posts from this blog

112325 What I Am An Agent...

Hello, I’m Hayden Childs I am based in North Alabama.  I reside in Lauderdale County,  Florence, ALabama. I am an Independent Life Insurance Agent… That means I work for  YOU  to find  YOU  the best deal in coverage available. I am thankful to be in an industry that is a  Blessing to people.   You may be asking yourself … Hayden, why are you an insurance agent? That one is easy …  I am doing this because I want to be a blessing to people.  I care deeply about helping people meet their final expense and other insurance needs. I am a Christian businessman, and I conduct my business in an ethical and professional manner. I Believe in Life Insurance … If you have personal coverage, you know what I am talking about. In YOUR time of need YOU don't have to wonder,  "Where is the money coming from?"  For YOUR final expenses.   YOU know because YOU made a responsible choice ...
Post a Comment
Read more

052022 quotes about life insurance...

Fun is like life insurance. the older you get, the more it costs. - Kim Hubbard   I don’t call it "Life Insurance," I call it "Love Insurance." We buy it because we want to leave a legacy for those we love. - Farshad Asl   If a child, a spouse, or a parent depends on you and your income, you need life insurance. - Suze Orman   Every month that you send a check to the life insurance company, you're making a bet with them. Don't worry, one day you'll win. - Nitya Prakash       www.haydenchildsatgotinsurance.blogspot.com  
Post a Comment
Read more

032123 Tips to Avoid Delays in Your Life Insurance Claim...

1. Make Sure Your Beneficiaries are Current.   I received a call from a client recently concerning her mother-in-law Who had passed. The primary beneficiary pre deceased the insured. No contingent beneficiary was named therefore this held up claim Payment.   Policy-owners can name anyone as a beneficiary, from their spouse, Or ex-spouse, to children, siblings, parents, business partners, A charitable organization or a trust.   Policy-owners may also designate a contingent beneficiary. This person or entity is a secondary recipient of the life insurance Policy payout.   The contingent beneficiary will receive the death benefit if the primary Beneficiary dies or cannot be found before the policy pays out.   Beneficiary designations need to be very clear and follow the Requirements of the life insurance policy.   2. Do Not Name a Minor.   When an insured lists a minor as a beneficiary, a life insurance claim...
Post a Comment
Read more