How Much Life Insurance Do I Need

Let's start at 10-15 times your income. How much life insurance you need depends on at least 4 factors we explore below

Life insurance
  • In this short 6 minutes read article, we shall answer:
  • 5 reasons to get life insurance
  • How to get multiple quotes for best offer

How much life insurance do you need? 5 factors to consider

The goal of having a life insurance policy to provide a secure financial life for your family just in case you are not around. You need life insurance if you have:

  • Dependants. If you don’t have savings that can take care of them for many years to come, you need life insurance
  • Which kind of insurance should you get? If you want to protect your family against estate taxes after your death, then consider a whole life policy. Universal life insurance is also an option.

5 reasons to get life insurance

Debt. If you have a $300,000.00 mortgage balance, $4000 car loan, $4000 credit card balance, you need at least $308,000.00. But that’s not all, you may have other debts like taxes. 

Replacing your lost income. After all, debts are paid off, life has to go on. All the bills you used to pay still have to be paid. If you have a partner, he or she may not be able to increase their income to cover what you used to pay. 

Insurance for your partner. The loss of a wife or husband can be emotionally devastating and also financially stressful. You may consider insuring your partner as this relates to replacing lost income from someone else. The loss of a child will not result in financial hardship since kids are dependents, but a spouse is different. 

Education. If you have small kids, you have to consider their education. College gets more and more expensive year after year. Your lost income means no more savings for college and more financial pressure on the family.

Final expenses. Funeral costs are up. The average funeral costs range from $7000 to $12,000. A huge amount to consider.

 

2 Must Consider Tips 

  1. If you have young children, consider a 30-year term life instead of a 20-year policy. Longer-term may have lower premiums and more time for parents to build assets over time
  2. Rather than purchasing one policy for two million, you could get two policies of one million each from two companies. You might pay less overall. Get easy quotes online in a few minutes.