How Much Life Insurance Should You Carry?
May 3, 2023
Jamie Fleischner

Jamie Fleischner

3 May, 2023
How much life insurance is appropriate?
  1. Income replacement: Life insurance should be sufficient to replace your income for a specified period of time, such as until your children reach adulthood or until your spouse reaches retirement age.
  2. Debts: Life insurance should be sufficient to cover your outstanding debts, such as mortgages, car loans, and student loans.
  3. Funeral expenses: Life insurance should be sufficient to cover your funeral and burial expenses, which can be significant.
  4. Education expenses: Life insurance should be sufficient to cover your children’s education expenses, if that is a financial goal.
  5. Assets: Life insurance should be sufficient to help provide for your family’s ongoing needs and help maintain their lifestyle, taking into account any existing assets or investments you have.

A general rule of thumb is to purchase life insurance coverage that is equal to 10-12 times your annual income. However, this may not be appropriate for everyone, so it’s important to work with a financial advisor to determine the appropriate amount of coverage for your specific situation.

The appropriate amount of life insurance varies based on your individual circumstances and financial goals. It’s important to periodically review your life insurance coverage with a financial advisor to ensure that it still meets your needs.

Related Posts

Life Insurance Provides Family with Silver Lining Copy

When Frank and Laura Ames, parents of two young children, applied for life insurance, Laura qualified for preferred rates while Frank was only able to buy a small policy due to a disability. Though Laura died several years later, the policy she purchased has left...

We're here to help

Getting the right disability insurance can be downright confusing. At Set For Life, we'll help you understand the options and work with you to select just the right product for you and your family. These articles will help you understand some of the complexities involved, but we're happy to walk you through it! If you're ready to get set, reach out for a quote today!