How Much Life Insurance Should I Buy?

That’s another question that I get often. The answer is…it all depends on your unique situation. Your life insurance agent can help you decide your policy amount after factoring in your income, children’s tuition, mortgage, retirement, medical bills, taxes, and other costs. To get a rough estimate of the life insurance policy amount you would need, multiply the income by 7, 8, 9, or 10. Thus, your benefit should be approximately 7-10 times the income lost. For example, if you generate $70,000 yearly income, you are looking at a policy of about $500,000 to $700,000. An advantage to life insurance that many people are not aware of is that beneficiaries are not obligated to pay federal income taxes on their life insurance payout.

Another factor to consider if you haven’t already is the life insurance benefits you may have from your job. Many jobs provide life insurance along with health insurance, vision, and dental. However, the life insurance policy amount in your benefits package is usually not enough to cover your family sufficiently. My advice is to deduct the policy amount you are planning on buying from the policy amount already provided to you by your employer.

After getting your free life insurance quote from Insurance Quotes 4 Free, make sure you go over your family’s expenses and income thoroughly with your life insurance agent. This way, you will be certain to get the right policy amount for you.