How Much Life Insurance Do You Need?
The easy answer is: “Buy as much life insurance as you can afford”. But, the truth is first you need to evaluate a few things.
For example, how do you determine the human lifetime value of a husband, wife, mother or father? Tough question isn’t it? Well, think of it this way…
If you died today, how much money would your family need right now to pay your debts and continue to enjoy their current standard of living?
First, itemize all of your debt obligations – to include your mortgage if you have one. How much of this burden can your loved ones handle when you’re gone?
Second, what about your lost income? How much in current dollars will disappear when you die? How much in future dollars?
What type of education do you want for your kids? If you live to a ripe old age you might be able to fund the schooling out of your earned income while you’re alive. But…
Can your family afford to pay for this without that income?
And, what about household emergencies? Will there be enough savings for your family to dip into when the car breaks down… or the frig needs to be repaired?
No one likes to consider their own mortality. But, if you don’t do it now… while you’re healthy enough to get some financial backup (life insurance) for your loved ones… the consequences might be devastating.
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