If you’re lucky enough to have a job that provides life insurance for its employees, you may think you’re covered — but it’s probably not enough. Group life insurance policies usually equal 1-2 times your salary, but that doesn’t include any commissions, bonuses and earning power. To replace your income for dependents, it is recommended you need 10-12 times your income. But, there are other factors to consider, too. Dust off your calculator and check the list below to determine the amount of life insurance needed to protect your family.
Multiply your salary by 10 (or determine how many years your family would need your income, and multiply your salary by that number)
Add $100,000 for college expenses for each dependent child
Add your mortgage balance
Add up your additional debts such as credit cards, car note, etc.
Add funeral expenses (average funeral expenses are $8,000 - $10,000)
Subtract liquid assets such as savings, existing college fund, current life insurance, etc.
If you don’t have any dependents or are single, your amount of life insurance needed may be different, but it’s still necessary. Life is unpredictable, so it is hard to know the exact amount, but overestimating financial need is better than not having enough insurance coverage. Contact our office today for free life insurance quotes and have peace of mind knowing your family is protected.