Many factors go into determining how much life insurance you might need. These include:
- the amount of your debts,
- any final expenses and estate taxes that will be owing on your death,
- the current and future care and education costs for your children, and
- the income your family relies on to maintain its lifestyle.
An insurance agent can take you through a detailed analysis of how much insurance (and what types) you may need.
4 questions to ask yourself
The amount of life insurance you get will depend on your answers to these 4 questions:
- Do you want the insurance to replace all or just some of your lost income?
- Do you want your family to live debt free or just continue paying down debt?
- Will you spend the capital from the insurance payment or just the investment earnings?
- How much can you afford to pay for insurance?
Calculate your life insurance needs
Most insurance companies have calculators on their websites.