How Much Life Insurance Should You Get?

One of the most asked questions about life insurance would definitely be, "How much life insurance should I get?" And what a loaded question that is. The fact is no one can really give you a number or even formula to help you decide on how much life insurance you need to purchase.

The amount of life insurance one needs is very individualized. Life insurance coverage takes into account your special set of circumstances including marital status, lifestyle, children you have, current income and other factors.

The first aspect to consider is replacing your income when you are gone. This is important only for those who have other individuals financially dependent on them. This could be a spouse or younger children. You will want to start at the very least with replacing that income stream. But many people often believe purchasing life insurance that equals their salary is enough. It isn't. You will need to consider healthcare expenses of your beneficiaries, particularly a spouse. Also, things you may have done around the house, such as cleaning, doing laundry, taking care of the yard or making repairs, may need to be performed by a hired worker.

Many financial experts suggest that a life insurance policy be able to pay off your entire mortgage at the time of death. Life insurance policies are also bought to pay for funeral expenses which can easily run several thousand dollars or more. You will also want to make sure that any children are properly cared for and higher education costs taken care of. If your children are adults and taking care of themselves your life insurance needs may change. However, some enjoy leaving an inheritance to their children after they pass. Certain individuals may even decide to leave a portion of money to their favorite charity.

Most people feel that focusing on financial realities after a spouse's death is a heartless thing to do. However, removing the problem of agonizing over money at a time of loss and grief is very helpful. If a spouse needed to cut work hours in order to spend more time with children after the loss of their parent, a life insurance policy with adequate coverage could potentially allow for this arrangement without burdening the family with money problems.

After considering these special scenarios, you should be able to better estimate how much of a life insurance policy you need. It is worth mentioning that the face value of your life insurance policy will not be subject to taxes. If you life insurance policy has an investment feature, the earnings may be taxed. You can use the free life insurance calculator on the website or if you prefer the LifeCalc mobile phone application to calculate your life insurance needs. Of course, talking to an agent about how much life insurance you need to buy is always a great idea. Find an agent fast or get free life insurance quotes on 2insure4less.com.