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...

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083121 Do You Know the Whole Life Story?

Change comes at us from every angle as people update and upgrade everything from their diets to their devices, seemingly every day. When we enter adulthood as a young professional, we never imagine that we are only a couple dozen phones or a handful of trendy diets from marriage, parenthood or even retirement. Diets and devices can be great, but not all change is good, right? At every stage of life, financially confident people know that they can embrace the good and safeguard against the not-so-good with solutions designed to do just that. Enter: whole life insurance. Not just your parents’ insurance, whole life can actually benefit you no matter where you are in life. THE BEGINNING: YOUNG PROFESSIONALS When we’re young and focused on our dreams, we rarely consider the possibility of an unexpected, devastating change. What would happen if you died prematurely? It may be unsettling to think about, as it would be very painf...

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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