How much Life insurance do I need? Take a moment to come up with a guess and write it down.
Got it written down? Good, you can keep reading.
How much life insurance do I need? It’s a question that few people ask themselves and fewer people have an answer for. If you’re like most, you’ve either never thought about it, or you’ve simply gone with the recommendation of the life insurance professional who sold you your current policy. And that’s okay.
Trusting the recommendation of a life insurance professional is fine given it’s a complex product with a complicated buying process that involves a detailed application and medical underwriting. But as with any major purchase that has significant financial implications, it’s important you have a basic understanding of how much you’re purchasing and why you’re purchasing it.
Calculating how much Life insurance coverage you need is easy if you follow a formula. There are many great tools available that do just this. The goal in doing this exercise is to think through how much Life insurance would be required to ensure that your family was able to continue their current lifestyle in the unfortunate event you were to pass away unexpectedly.
We recommend using the ivari My Insurance View tool. This great online wizard will walk you through a series of questions that will calculate the Life insurance payout required to:
- Cover your current debts;
- Replace your income for the benefit of your family; and
- Allow for final expenses.
The end result is the amount of Life insurance you should consider putting in place. As mentioned above however, Life insurance is a complex product with a complicated buying process that involves an detailed application and medical underwriting.
Depending on your individual circumstances, your personal health, and a range of other factors, the pricing can vary from person to person. It’s important that you work with a Life insurance professional who can help you navigate the process to ensure you get the best possible coverage for your situation at a price that works within your budget.