How Much Life Insurance Should I Purchase?

The amount of life insurance you need depends largely on where you find yourself on your life journey. At the beginning, as a solo act, you might not feel the need to provide your beneficiaries with much more than the cost of settling your affairs should your life come to an untimely end. Later, you may find your responsibilities increase. Maybe you're recently married with a new mortgage and you worry about making provisions in the case your spouse is left widowed and without your income, or your children are left without the parental guidance and provisions for college you'd always planned for them.

The bottom line remains, the greater your responsibility, the greater your need for increasing life insurance coverage. If you earn a good portion of your family's income, you'll want to provide for them in the event of your death. A worthwhile rule of thumb is to obtain 5-10 times your current salary in life insurance. That means if you earn $50,000.00 per year, you'll want to ensure that your beneficiaries will receive somewhere between $250,000.00 and $500, 000.00 from your life insurance payout.

Life Insurance Provides for Your Family

You can let your financial commitments be your guide when choosing the amount of life insurance to purchase. However, as you go through life, your financial responsibilities change. Your investments may or may not be of increased value at the time of your death, so they typically aren't a reliable cushion, though they will allow you to leave something for your dependants. The most reliable and straightforward way to provide for your family upon your death is by purchasing a life insurance policy that provides a more than adequate settlement to meet the needs of your loved ones and help them rebound after your death.

Planning for tomorrow isn't simply about your future needs. Your family, and possibly other individuals, depend on you. Your children and spouse count on your being there to a ripe old age, gathering the family together year after year, or perhaps for the once in a lifetime celebrations of college graduations and weddings, grandchildren and retirement. If you're no longer in the picture their lives will be forever altered by your absence. Don't let your absence shatter their future dreams altogether.

Make sure you secure a large enough policy to provide for all your plans for tomorrow. Be sure your family has the funds they need to make your funeral arrangements. Protect those you love and care about from income loss and financial disaster by providing for them through your life insurance policy. If you're the sole support of aged parents, take steps to provide for their continued care upon your demise.

Assessing Your Life Insurance Needs

If you're a young person, just beginning your life's journey, you can't possibly predict the future. You can make adjustments going forward to provide adequate coverage for your beneficiaries by adding to your policy or obtaining a rider to increase the amount of coverage you provide. If you're established and have responsibilities already in place, then you'll want to assess your needs more critically.

You'll need to determine the income amount your family will lose should you die any time soon and use that to decide how much life insurance to purchase. Gage your employee benefits as well as your salary and any investment opportunities in retirement. Weigh that against your expenses and any costs you'll have related to your death. Life insurance is there to provide for your family later and provide for your peace of mind now. Compare all of your future needs to determine the amount of life insurance you should purchase.

Free, no-obligation quotes from multiple companies

Your information is safe and secure

"Thanks for making it so easy!" - Marlene Q, Austin TX