Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
This varies for each person. A lot of variables go into the calculation of determining how much life insurance you need, how long you need it, and what is an appropriate amount to actually secure. A life insurance calculator can help with this. A few things to get you started when calculating out what you need and how long you need it for are:
1) Do you have a mortgage? If so, how much is left on it and how many more years do you have to go until it's paid off?
2) Any final expenses you want paid off (e.g. burial expenses, credit card debt, medical bills)?
3) Education expenses for you or a family member you want to pay off (such as college tuition)
4) Income replacement - this is a big one! A question to think about here is how much income would be needed if you died today and how long would your family need it to maintain their current lifestyle.
An experienced life insurance broker can help you with this and make it a much smoother, easier process.
One thing to also note, a lot of people think "once i'm retired, I won't need life insurance anymore so I can just buy term insurance and let it go when I retire" - there are many many many reasons why you should have life insurance during your retirement years. For example, if you're receiving a retirement pension and you die, the pension income may stop and not continue onto your spouse (if you chose the pension max option over the survivorship option when you started receiving benefits) - this can also apply to social security income. That's just one scenario.
Please feel free to contact me for help and if you have any other questions. Thanks very much.
That is an excellent question! The answer is that it depends upon what you want the insurance to do for you. If it is just to cover funeral expenses, then typically a smaller, $10-20,000 policy should be fine. If you are trying to cover mortgage, college, or other major debt that would be left to your spouse, then you want at least that much. If it is to provide a legacy for your children, then however much you'd like to bless them with is the amount needed. If it is to provide your spouse with the income lost when you pass, then you will want to do some math, and decide upon how many years' salary to choose. If you need help, please contact me, okay? I'd be happy to help. Thanks for asking!
President, Lane Independent Agency, Southern California
Got family? Got a house? A Mortgage? Kids? Keep your spouse happy and feeling secure. Do not get in over your head, since you might be tempted not to keep the policy up. But get what you can afford, try to cover the mortgage, the kids education, and future medical care, food, vacation, and just life. Thank you. GARY LANE.
You should carry enough life insurance not to leave the people you love in a financial bind if you were to die today. You want enough to payoff a mortgage, eliminate all debt, educate your children if any, run your business if you have one, and leave an amount of at least ten times your income so your loved ones can invest the amount and the annual interest will replace your annual earnings. That is the responsible amount of life insurance to be purchased.
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1) Do you have a mortgage? If so, how much is left on it and how many more years do you have to go until it's paid off?
2) Any final expenses you want paid off (e.g. burial expenses, credit card debt, medical bills)?
3) Education expenses for you or a family member you want to pay off (such as college tuition)
4) Income replacement - this is a big one! A question to think about here is how much income would be needed if you died today and how long would your family need it to maintain their current lifestyle.
An experienced life insurance broker can help you with this and make it a much smoother, easier process.
One thing to also note, a lot of people think "once i'm retired, I won't need life insurance anymore so I can just buy term insurance and let it go when I retire" - there are many many many reasons why you should have life insurance during your retirement years. For example, if you're receiving a retirement pension and you die, the pension income may stop and not continue onto your spouse (if you chose the pension max option over the survivorship option when you started receiving benefits) - this can also apply to social security income. That's just one scenario.
Please feel free to contact me for help and if you have any other questions. Thanks very much.