Learn about the different types of life insurance and why an up-to-date policy is an important part of a sound financial strategy.
How Much Life Insurance Do You Need?
When it comes to the best type of life insurance for an individual, There is no one-size-fits-all. How much and what type of coverage is needed is based on the individual and their:
- Age
- Health
- Income, current financial situation
- Number of dependents
Furthermore, the life insurance policy most suited for an individual will change over time. Major life events like getting married, divorced, having children, or changing your income can all influence your life insurance policy.
Based on these considerations, a basic rule of thumb is to have enough life insurance coverage to provide approximately 10 times your annual household income. For example, if the current household income totals $50,000, consider having a total of $500,000 in life insurance protection.
Finding The Right Insurance For Your Future
When working with an agent to assess your life insurance needs, consider these questions and answer them honestly: How much long- and/or short-term debt do you have? What are your long-term goals? How much of the insured’s income will be needed and for how long (how many years)? How much do you want to set aside for funeral costs and/or an emergency fund? What assets do you have that may be able to cover these costs?