So you’ve made the decision to purchase life insurance. Then you ask your agent how much you need. Unfortunately, there’s no one size meets all when calculating coverage amount. You can start by taking a look at the following tips.
Consider Your Annual Salary
If your family depends on you for financial support, consider life insurance to replace your income. It is usually recommended to have coverage to cover the expenses until your youngest child reaches 18 years. Many experts recommend you have coverage that’s at least five to seven times your annual gross salary. It really depends on your family's situation and your individual needs. It’s important to take into consideration how much your family will need to get by … and for how long.
Look at Your “Hidden” Benefits
Consider additional life insurance which you love ones may inherit from company plans. Usually group plans have life insurance coverage which pays beneficiaries various amounts upon the death of the assured. Keep in mind survivor benefits which is paid through NIB.
Determine your GoalsThe reason you are buying life insurance determines how much you should purchase. If you have dependents, you’ll want to make sure you have enough to meet their current and future needs … plus cover funeral and medical costs and other bills you may leave behind. Consider housing costs, living expenses, and education costs, if your family is young. If your children have already left the nest, your insurance should be enough to help your spouse live comfortably and have the funds to cover rising medical costs and other expenses.
Thanks again for the info.
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