How Much Life Insurance Do I Need?

The best approach as to how much insurance to buy, is to consider your own personal needs, although there are “rules of thumb.” One of those rules would be that life insurance should be ten or twenty times of your annual income. Try to be sure your survivors have enough proceeds, in the event of your death, to meet their financial needs.
Begin by making a list and estimate the expenses that need to be covered as a way to estimate how much money is needed. This list could include funeral expenses, mortgage payments to cover your spouse and kids, education, household expenses etc. The advice of a financial planner – preferably one who charges a fee but does not sell products, can be contacted if you have difficulty making your list. You can also make use of the “calculators” that are on the websites of many financial and insurance companies.
In order to provide adequately for your dependents and survivors, the end result of this process is to estimate the amount of life insurance you should have. Due to life changes, of course, this amount will generally change over time. Therefore, make sure you periodically review your numbers as a way to keep them up to date.