THURSDAY, NOVEMBER 30, 2023
When it comes to buying life insurance, you’ve probably heard plenty of rumors about how much to purchase. Some people think a certain dollar amount or several times one’s income is the right amount. But the truth is that the right amount is different for every policyholder. How much should you purchase? 
Start by calculating your debt. Add up your mortgage(s), car loans, credit card debt, student loans and any other forms of debt. Once you have a total sum, add in enough money to cover interest fees. Any good life insurance policy will cover at least this amount to relieve your loved ones of the financial burden.
For those who wish to leave their families with more monetary protection, calculate your income replacement. To do this, divide your annual income by five to eight percent (based on the rate at which you plan for the payout to be invested), then add that amount to your annual income in order to account for inflation. Some people wish to purchase a few years’ worth of income replacement coverage, while others wish to purchase enough coverage to carry a spouse through retirement age. It depends on personal preference.
Next, you’ll need to decide if you wish to purchase enough coverage to support your children’s college educations and/or weddings. Figure out how much extra coverage you want to purchase for such family events and add that to the running total you already have.
Calculating life insurance needs isn’t always an easy task. Discuss your options with an independent insurance agent so you can make an informed decision about your family’s future.
Protect your loved ones. Contact us today for more information on life insurance.
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