The Total Coverage Blog
When deciding how much life insurance you’ll need, you can use the basic rule of thumb that says you should have 5 to 8 times your yearly salary in coverage. Like most things insurance related, there are more factors involved in answering this question — such as your lifestyle and your financial situation.
Read our blog to calculate your life insurance needs — and to see some sample life insurance premiums.
Generally, almost all life insurance agents and experts agree that most people just don’t have sufficient life insurance to meet all of their needs. Either they have too small of a policy or they have no personal life insurance at all.
When looking at a very basic — but safe — rule of thumb to decide, “How much life insurance do I need?”, establishing 5 to 8 times your yearly salary is a good place to start. Essentially, you want to calculate life insurance needs that would pay off debt, cover final expenses (funeral costs, for example), create an emergency fund, and replace your income for 5 to 10 years.
After receiving a life insurance payment and covering expenses and lost income, if there are additional funds, your strategy should be to cover expenses, pay off debts, and finally use it as an investment that can earn you a reliable return.
People in the 21st century have far greater needs and requirements from their life insurance. The basic cost of living and the cost of healthcare has increased significantly — your life insurance needs to keep up. Even if you have life insurance through your employer, you should strongly consider getting personal coverage. If the insurance premiums are maintained by your employer, losing your job means losing your coverage.
While the 5 to 8 times your salary rule of thumb makes a safe projection for most Americans, there are some extenuating factors that mean you need more life insurance.
Here are the major reasons you NEED more than a standard amount of life insurance:
The safety net and the peace-of-mind conferred by life insurance is a factor that makes it an attractive idea for many Americans. However, one of the most important factors people consider when deciding how much life insurance they need is the cost.
The cost of life insurance is determined by several factors:
Do you find yourself wondering, “How much life insurance do I need?” Working with a trusted local insurance agent is the best way to get that answer.
An experienced life insurance agent can help you determine what your family’s needs would be in a catastrophe and can plan a policy to match it. In addition, a skilled agent can tailor a solid plan to what you can afford to pay every month.
Finally, in the event that you need to collect on your policy, your insurance agent can assist your family to ensure all paperwork is filed correctly and as quickly as possible.
Unruh Insurance is an experienced local insurance agent with dedicated life insurance specialists. Contact us today to learn about your life insurance needs — and to get a free quote.