Life Insurance: How much?
I’m often asked how much life insurance does someone really need? It kind of depends on what their situation is, whether they are retired and just looking a final expense plan; or they are a young family. Here’s the main factors I use:
- Immediate expenses (such as burial expenses, estate/probate costs, unpaid medical bills)
- Outstanding debts (mortgage payments, credit card debts, car loans)
- Future goals (such as college for kids, private school, spouse’s retirement)
- Income replacement (how many years you want your income supplemented)
Depending on how you answer those questions, your insurance need could be between $100,000 and $1,000,000. That’s why it is beneficial to sit down with an insurance planner, such as myself, to determine the best way to cover these items within your budget.
Trust me. $250,000 may sound like a lot of money, but it goes really fast, especially if you have young kids.