Get a Free Term Life Quote Top Insurance Companies Protect Your Loved Ones Fast, Convenient and Free! Do You Have Enough Life Insurance? You might wonder — do I have enough life insurance? In short, no. You probably don't. When it comes to protecting your family after your death, there is really no amount that is too much, but there can certainly be too little. A Rough Figure Just to computer a rough figure, let's pretend you are a thirty-five year old father who wants to protect his five year old son and wife through his son's graduation from college. You'd like to continue your current income, pay off existing debt such as credit cards, possibly pay off your mortgage or a car loan to free up assets, pay funeral expenses and leave plenty to help with your son and wife's future. If your wife doesn't have a means of income, you'll need to provide even longer to help her stay afloat until retirement benefits (if any) kick in. At five years of age, your son has approximately twelve years of school ahead of him before reaching college. He'll likely graduate from college in seventeen years. As term life insurance is sold in increments of five, you'll likely purchase twenty years of coverage. The amount of time for coverage is straightforward, but how much should you actually buy? Let's do the math: Your funeral and burial will run close to $12,000 most likely. Only you know your debt situation, but the average family has about $6,000 in credit card debt. Let's say your current auto loan has an outstanding balance of $15,000 and your home has $150,000 left on the mortgage. Already, you're looking at $183,000. Of course, if you continue your current monthly income, paying off the mortgage isn't a priority, so we'll deduct that number and you're looking at $33,000 so far. RECENT LIFE INSURANCE ARTICLES Do You Have Enough Life Insurance? The Insurance You Must Have Your Future Income The part that gets tricky is calculating the income you won't be making for your family when you die. If you currently bring home $4,000 a month, that figure times 240 months in your twenty year term is $960,000. And of course you know with inflation, the $4000 you earn today will buy far less in just a few years. If you factor in inflation over the next twenty years, you'll be looking at roughly twice that amount. All told, you should have an insurance policy worth about $2 million – and that's if you're currently making about $50,000 a year. Ridiculous? Not really. Realistic Life Insurance Needs If protecting your family is important to you, and of course it is, you'll want to arrange as much insurance as possible to keep them comfortable when you are gone. Comfortable, however, is relative to each family. If your spouse works, you can factor that income into an equation for how much you need. If paying off your mortgage would give your family breathing room well into the future, you might plan for life insurance with a different strategy all together. You should always discuss life insurance amounts and how you feel the money would best be used with your spouse or appointed guardian for your child. You can also leave the money to a trust with more specific requests for distribution. The bottom line, however, is you should buy as much life insurance as you can realistically afford. Then you'll never have to worry about your family's financial well-being after you've gone.

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