How much Life Insurance do I need?

Posted on
March 1, 2015 by

That’s an important question!  How much money your family will need if you die and are not able to provide for them?  Everyone’s financial picture and priorities are different but there are a few simple steps to determine a coverage amount that meets your needs.  First, determine how much will your loved ones need to pay for immediate costs like funeral expenses, legal and estate fees, and any outstanding debt like credit card debt and even your mortgage.  Second, determine how much your loved ones will need on-going to pay for everyday expenses for a period of time to off-set the loss of your income.  A simple way to determine that is to multiply your annual salary by the number of years you think your family will need on-going financial support.  If you have young children, you will need to plan for additional childcare expenses that might occur as well as future post-secondary education costs.  Third, review your existing income sources that your family could use to meet their financial needs (eg: surviving spouse’s income, savings & investments, and other life insurance policies).  The difference between your family’s financial needs and the income sources in place to help your family meet those needs will help you determine the amount for additional life insurance coverage.  Life insurance is an essential part of a sound financial plan.  Feel free to contact me to help you determine your life insurance needs and provide solutions that help meet these needs.