How much coverage you want will obviously will effect your premium payments, but there are so many other elements to think about. Our standard rule of thumb is purchase as much as your budget will allow.
Below are some factors that we recommend considering when setting up your life insurance policy:
1. The Mortgage
We recommend that couples get enough coverage so that if something happened to either of you, the other would be able to pay off the house so that wouldn't be a worry moving forward. Paying off a home completely doesn't have to be your ultimate goal but even if you can factor in enough cash to allow your significant other to pay it off more quickly, that would probably be a big help during a very difficult time.
2. Annual Expenses
If you depend on your spouses salary its is important to consider the missing income if something happened. Death and grieving of a loved one does not stop the bills. We recommend to make sure that the other person would have sufficient funds to cover the missing salary for 10-15 years to allow the other to get back on their feet. It is important to note that stay-at-home parents need life insurance too. Salary.com reports that stay-at-home parents contribute the equivalent of a $162,581 annual salary.
3. College Planning
The cost of college adds up quickly. We recommend to consider the cost of a 4-year degree per child when determining the amount of insurance you need.
Determining the amount of life insurance needed, does take some upfront time, but the peace of mind you'll get from knowing your loved ones will be financially secure should something happen to you makes it all worth it. We have a worksheet than can assist in determining the amount of life insurance you and your spouse needs. Call our office or email us and we will send it to you!