Some financial counselors recommend spending a certain percent of your income on life insurance. However, there are so many different uses for life insurance, and the price varies so much based on age and health and the type of policy purchased, that it doesn't always work to use a rule of thumb.
If you are a retired person with a high income and net worth, you may want to purchase life insurance to avoid and/or pay estate taxes, and to transfer your wealth to your heirs. The cost of this type of policy could be pricey, but it would save you a lot of money.
In contrast, you may be a young newlywed who can only afford to spend only $20 per month on life insurance. This could possibly buy $250,000 of term insurance for you and your spouse. At that time in your life, that expenditure would be appropriate.
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If you are a retired person with a high income and net worth, you may want to purchase life insurance to avoid and/or pay estate taxes, and to transfer your wealth to your heirs. The cost of this type of policy could be pricey, but it would save you a lot of money.
In contrast, you may be a young newlywed who can only afford to spend only $20 per month on life insurance. This could possibly buy $250,000 of term insurance for you and your spouse. At that time in your life, that expenditure would be appropriate.