How much life insurance you need is like your fingerprint, it’s unique to you. When using the needs calculator make sure to not forget about any final expenses(funeral costs, medical bills, legal fees, etc.) that may accompany the passing. Take your time with this calculator as it can make sure you don’t leave any stone unturned and will give you a good idea for the amount of coverage you should shop for while comparing quotes on your own.
How Much Life Insurance Do I Need?
When looking for life insurance coverage there a few things to keep in mind when it comes to coverage amount. If you have financial responsibilities you want to make sure you get adequate protection to protect them. Let’s discuss a few factors to consider when deciding how much life insurance you need.
Replacing Income – If you have financial dependents, replacing your income will be extremely important if you want them to maintain the lifestyle you’ve been able to provide. Usually life insurance agents recommend multiplying your income by 10 to 15 years to figure out how much coverage need. However this strategy can leave out some very important parts of the equation.
Debt – Make sure the total death benefit amount includes any outstanding debt. This will include things like your mortgage, car notes, and any other credit or loans that you have out. This isn’t something you would want to leave your beneficiaries struggling with.
Final Expenses – This is one of the factors that remains consistent no matter what point of your life you’re getting coverage. Funeral expenses can cost $10,000 to $25,000 depending on the kind of funeral you would like to have. Another final expense is any medical bills that you may incur at the time of death. Rarely is your passing not accompanied by a last visit to the hospital so make sure to consider that in your calculations.
College Education – If you have kids you will want them to have their education paid off. So unless you have already have their future education funded then it’s important to throw this cost into the mix. Consider the average cost and the type of education you would like them to receive. This will make sure you have the proper death benefit amount left to your spouse and kids.
Assets – This is the part of the equation where you get to do some subtracting. The assets you already have is a huge part of determining your need for life insurance. If you have savings, investments, and anything else that can help your beneficiaries then you want to either subtract or not include that in your total coverage amount.
Legacy – It’s not unusual to want to leave a little “extra something” to your loved ones. So considering how much of that you want to leave. The only thing to be aware of is that the coverage amount has to be justified to the life insurance company to be approved. So if you make $100,000 a year, you probably won’t get away with requesting a 10 million dollar life insurance coverage.
Consider Cost
While it’s nice to get the coverage amount we need, it’s not always the affordable for you current situation. It’s not a good idea to avoid getting coverage just because you can’t get the coverage you need. Something is always better than nothing so make sure to get a coverage amount you can afford comfortably without causing the policy to lapse.
The Best Life Insurance Needs Tip of All Time
The best professional advice that I can give you is work with a professional and don’t try to do this yourself. This will ensure that your needs are properly assessed and ensure that you not only get the right amount but the right type of policy. Give us a call at 888-492-1967 or compare life insurance quotes here and request an application online.
