How to estimate the amount of life insurance you might need
Posted in: Life Insurance
Calculating how much life insurance is necessary
The question of how much life insurance to buy is one that has plagued consumers for decades. When you think about leaving your family with nothing but a memory and your life insurance death benefit proceeds, it seems like no amount of life insurance is too much.
But when you compare life insurance rates, you may find that, no matter how much you want to, you can’t afford to buy a policy worth trillions.
In order to determine how much life insurance your family might need to get after your death, consider what their lifestyle needs will be. If they want to continue living in the same home, taking the same vacations, and putting the same amount of money away for retirement and education savings, you should consider getting enough life insurance to replace your salary for several years.
If your family simply wants to be debt-free upon your death so they can continue living in the same location, a death benefit equal to the amount of your debt may be enough.
If you want to leave a legacy for your children and ensure that they are able to attend the college of their choice without it draining your surviving spouse’s savings, a death benefit that pays off debt and leaves a little extra for education expenses would be suitable.
Remember, you can never have too much life insurance. Whatever you can afford to get will help ensure a happier, less stressful life for your loved ones after you are gone.
See also: Comprehensive life insurance calculator
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