So You Have Life Insurance—But is it Enough?


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Life insurance may be one of the most important purchasesyou’ll ever make. However, many people greatly underestimate the amount of life insurance needed.

In order to answer the question of, “how much?” ask yourself:

  1. Upon your death, how much will be needed to meet your current obligations? – (Income shortfall for your family, significant debts, funeral expenses, the cost of college for your children, the cost of special care for family members, etc.)
  2. How much future income will your family need to sustain the household?

If you are a business owner, you will also need to allow for income replacement and debt obligations for business partners or anyone with whom you have a financial relationship.

It’s also a good idea to routinely evaluate your life insurance needs. Most people don’t realize that your life insurance needs change as circumstances in your life change.

Just about any imaginable life event can have an impact on your life insurance needs. The following is a list of obvious and not-so-obvious factors that affect the amount of life insurance needed:

  1. Getting married
  2. Having a child
  3. Buying a home
  4. Taking on debt
  5. Changing jobs
  6. Supporting aging parents
  7. Changes in your business
  8. Changes in your marital status
  9. Planning for college
  10. Planning for retirement

Be sure to re-examine your life insurance needs at least every few years and always when big changes, or life events, occur.


Life Insurance Needs Calculator

To see a rough estimate of how much life insurance is right for you, click on the image to the right for an easy-to-use needs calculator:

Please keep in mind that online calculators are in no way a substitute for the professional guidance of a licensed insurance agent or financial advisor. When you are ready to review your life insurance needs, an independent agent can not only advise you on the amount of life insurance needed, but also the proper type of policy to meet your individual needs.