How do I know how much life insurance I need to get for me, for my wife and for my children?
Have you actually sat down and calculated how much money your family or beneficiaries need based on your situation?
Before you throw out the final figure on the life insurance application, you owe it to your family to Calculate how much life insurance you need for your particular situation.
Many people guess and throw out a figure based on a round figure of say “100 thousand or 200 thousand or 500 thousand or 1 million dollars. These numbers may sound great to you or your spouse or your kids, but are they enough or are they overkill? Will your family have enough money for their long term needs? Are you giving your spouse only enough money to pay off your debts, but not any money to live on and if you are to die unexpectedly, will your spouse and kids not have the basic survival money. Will they have money for education expenses (college / university), etc..
Will your spouse be forced to go back to work? Suprisingly, this has happened to others when proper planning wasn’t done.
These are vital and important decisions to make.
Another key and important issue is: Does your assets, your income and your age support the amount of insurance that you are applying for?
Are you replacing an existing policy or getting additional coverage? Are you asking for more insurance than you should have based on your assets, debts, income and needs of your beneficiaries.
for Income replacement, this can be 10 to 30 times what your current income is, pending on your current age and the insurance carrier (company) allows. Under the age of 40, some carriers allow 25 times your income, some allow 30 times your income. As your age increases, you have less years to retirement and your allowed multiplication factor decreases as your income replacement as an industry normal is less due to: 1) Savings should be greater 2) Debts Less 3) Closer to the age of drawing on social security 4) Closer to the age of taking from retirement
If you own a house, factor in your mortgage loan.
If you don’t own a house, the insurance industry allows up to an average of 250K (some areas of the country more & some areas less) to be allocated for your beneficiary to buy a house.
You need to factor in Final Expense costs to the equation too. (On average this is $10,000 to $25,000).
There are various methods to calculate how much life insurance you or your beneficiaries will need based on your situation of life right now.
I would suggest to either get a a pad of paper and make a list of your assets, liabilities, income & expenses.
Then transfer this into a spreadsheet (if you like spreadsheets).
For the individuals and families that have an estate that is valued in excess of 3 to 5 million dollars, how much of the estate is going to be taxed? You need to consult with your CPA. If you want to transfer the the funds to your beneficiaries tax free, it is cheaper to buy a guaranteed life insurance policy than to solely rely on transferring the funds and pay taxes. We propose a strategy that we can help in transferring a portion of the assets to buy a life insurance policy and receive a guaranteed payout on life insurance.
Apply online for life insurance www.insuremyliferight.com/apply