Tips to help you determine how much life insurance coverage you need.
Life insurance is designed to protect your family when you are no longer around to do so. From funeral expenses to remaining debt to everyday life, your family can use life insurance to avoid financial hardship when you’re gone. If you’re in the market for life insurance, here are some tips on how to know how much life insurance you need.
Identifying the appropriate type of coverage will be your first step in securing life insurance. You’ll have to decide whether you want permanent coverage (whole life insurance) or temporary cover (term insurance). Once you’ve decided on which type you want, you’ll need to choose your coverage amount. This amount will be paid to your beneficiaries to help with their costs and goals.
Life insurance policies aren’t created to be one-size-fits-all. However, a common standard rule of thumb is having coverage that’s 5 to 10 times your annual income. Since life insurance is designed to protect your beneficiary from financial hardship should anything happen to you, you’ll need to take into account your expenses such as the mortgage or rent, childcare, debts, bills, and future financial goals. You may want to have the peace of mind that your spouse can afford college tuition for your kids or that your spouse gets to retire on time as planned. In addition to the everyday expenses that your family have, also consider the lifestyle you want for your family.
The amount and level of life insurance cover you need will depend on your own personal circumstances. Talk to a trusted life insurance advisor to determine your policy and coverage exactly. Contact Donald Weiss Insurance Services to get started on your coverage today.
