Retirement Income Strategist, KJ Financial, Liberty, Missouri
Yes you can. More people don't have enough life insurance, but you can have too much. The life insurance companies have methods in place to monitor for that. Your best bet is to sit down with a qualified life insurance agent and conduct a complete needs analysis and discover what you want your loved ones to experience if you are gone and that should help you to decided how much life insurance coverage to get.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
There's generally a limit to how much life insurance you can have. With most insurance companies, this limit is 20x your income - some companies may view a limit of 25x income or 30x income. Even if you do not have your entire coverage with one carrier, these limits will still apply - on every application, the carrier will ask you about existing or pending coverage and want to know the total amounts you have or are looking to place in force.
Keep in mind, there has to be an insurable interest and a need to buy the coverage (e.g. income replacement, estate planning purposes, family protection, etc.).
The average person doesn't have enough coverage to cover every financial need - generally due to their ability to write the check for the amount needed to cover every need and/or not understanding how much coverage would be necessary to cover all of the financial needs). A life insurance needs analysis is a great way to determine how much coverage you would need to cover all financial burdens in the event of your death - as many may not want to buy the resulting amount, you can break the figures down and determine which needs are the most important to protect.
Your best bet is to work with an independent life insurance agent/broker than can go through the needs analysis process with you and compare multiple options to find the program that will best serve your needs.
Too much is whatever is more than you need. For example, if you are independently wealthy or have no dependents, any amount of life insurance is too much.
For everyone else, too much is whatever is more than you need to cover your dependents and debts if you are gone. Otherwise, your money is put to better use if you pay off your mortgage and outstanding debt, invest in an IRA or college fund.
Use a good life insurance needs calculator, to match your needs with the amount of coverage you should have. You can find one at http://www.qualitytermlife.com/#needs
Yes, there is a formula that life insurance underwriters use to calculate the amount of life insurance you may purchase. Different insurance carriers use different but similar formulas. Depending on age it could be as high as 35 times annual income or as low as 20 times annual income. The underwriters will also consider your assets as well. Remember there must be an insurable interest in order to purchase life insurance. This means a person, loan institution, loved one, or business partner would suffer a financial loss upon your death. This can be more important than the face amount.
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Hope this helps.
Keep in mind, there has to be an insurable interest and a need to buy the coverage (e.g. income replacement, estate planning purposes, family protection, etc.).
The average person doesn't have enough coverage to cover every financial need - generally due to their ability to write the check for the amount needed to cover every need and/or not understanding how much coverage would be necessary to cover all of the financial needs). A life insurance needs analysis is a great way to determine how much coverage you would need to cover all financial burdens in the event of your death - as many may not want to buy the resulting amount, you can break the figures down and determine which needs are the most important to protect.
Your best bet is to work with an independent life insurance agent/broker than can go through the needs analysis process with you and compare multiple options to find the program that will best serve your needs.
For everyone else, too much is whatever is more than you need to cover your dependents and debts if you are gone. Otherwise, your money is put to better use if you pay off your mortgage and outstanding debt, invest in an IRA or college fund.
Use a good life insurance needs calculator, to match your needs with the amount of coverage you should have. You can find one at http://www.qualitytermlife.com/#needs