How Much Life Insurance Is Enough?
To decide how much life insurance you need, you need to figure out what your dependents (your spouse and children) would have if you were to die now, and what they would actually need. Your life insurance policy should come as close to making up the difference as you can afford.
In figuring what you need, think of income for your dependents, family living expenses, educational costs and any other future needs. Cash needs should be considered as well for final illness and paying taxes, mortgage or other debts.
Use the following guidelines to determine how much insurance is necessary for you:
- Final Expenses
- Emergency Fund
- Mortgage Balance
- Outstanding Loans
- Education Costs
- Monthly Income Requirement
- Review your insurance needs and circumstances
- Be sure the premiums are within your ability to pay
Use this a life insurance calculator for determination of how much life insurance you should purchase.