When it comes to life insurance it can be difficult to predict how much coverage you need. There are several factors to consider. These include how many children you have, cost of living, and how long you will be replacing income.
The Simple Solution
According to our Financial Insurance Advisor and resident life insurance expert, Nick Deas, the amount you need is oftentimes 10 to 20 times your annual income. For example, if you make $50,000 a year the amount of life insurance coverage you’d need is anywhere from $500,000 to $1 million. Now it may seem like taking the easy road would be productive enough, but doing so doesn’t factor in whether you and your spouse are insured, whether you have saved already, or expenses for a child’s college education.
A More Detailed Look
Knowing what you’re saving for and breaking down the amounts can be helpful when choosing your life insurance. One factor to calculate and consider is debt. This includes your mortgage, credit cards, loans, and anything else that has yet to be paid off. The next factor is your children’s educations. Deas’ estimate is $100,000 per child for room, board, and tuition for a four year degree. This may not apply if you already have a fully funded college payment plan. The final factor is the amount of income you are replacing and the length of time it is needed. If you are a stay-at-home parent then you should consider the cost of keeping up your home and childcare versus a traditional salary.
Give Nick Deas a call, 352-371-7977, or email him, [email protected], today for different quotes and options for your coverage. Don’t wait until it’s too late!
