Co-Founder, Coastal Financial Partners Group, California
A life insurance professional can provide a customized analysis using one of the conventional methods which center on a capital needs analysis. The calculations look at how much you need as a lump sum to create an income for your family.
For a high level view, you can run some numbers yourself. There are a wide variety of online calculators available such as this one:
Online calculators can help you visualize the need and better prepare you for a planning discussion with your agent who will help you ensure you have the right amount of life insurance.
There are a variety of factors to consider. First, final expenses. This includes cost of burial, funeral, flowers, cemetery plot and other items. The national average is around $8 to $15,000. Then you need to consider an emergency fiund if you are married. The normal recommendation is at least 6 months of your salary. This will provide your wife enough money to get on her feet and if minor children are involved, provide care for them until social security starts to pay. Next consider mortgage and other debts, if you were out of the picture, will there be enough money to cover those debts and still provide for the family. Do you want to help with your kids college? Many people will provide for a college fund if they pas on prematurely. As you can see there are a lot of factors to consider. Once we determine the amount of coverage needed then we need to consider an affordable way to pay for it. This is where a good independent agent can help you. With a combination of term and whole life insurance most needs can be met. Find an experience agent who represents many life insurance companies and can help you select the plan that is right for you.
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For a high level view, you can run some numbers yourself. There are a wide variety of online calculators available such as this one:
http://www.myconfidentfuture.com/insurance/Calculator_01.aspx
Online calculators can help you visualize the need and better prepare you for a planning discussion with your agent who will help you ensure you have the right amount of life insurance.