If you’re thinking about getting life insurance, good for you! You’re making a smart decision to help protect your loved ones’ financial future.
So, let’s get started. How much life insurance should you get? You’ll want to make sure your coverage will help your family handle day-to-day needs and ongoing expenses in the event of a passing.
To get a fairly accurate coverage estimate, you’ll have to do a bit of homework, but it’s worth it. You can start by compiling all of your current and projected expenses, including daily needs like food and utilities (you may want to instead use an estimate of how much of your current income your loved ones would need to cover these expenses), as well as bigger costs like debts, housing, childcare, education (don’t forget future tuition!), and funeral expenses.
Next, add up your assets, including bank accounts, investments, retirement accounts, CDs and existing life insurance.
After that, subtract the sum of your assets from your total expenses, and the resulting amount will give you an idea of how much life insurance you’ll need.
To make all of this easier to figure out, we’ve created a handy Life Insurance Needs Calculator. Feel free to try it out!
Once you’ve determined your life insurance needs and are ready to take the next step, your insurance agent can help you decide what options are smartest for protecting your family’s financial future.