Learn how to calculate your life insurance needs.
While most Americans can agree that life insurance is an essential coverage, many put off getting this type of insurance. This is partially because the process of determining how much coverage you need can be complicated. If you are struggling to figure out how much life insurance you need, read on. These are the major things you should consider when getting life insurance.
- Child Education Expenses
If you have children, it’s important that you make provision for their future educational endeavors. A good rule of thumb is to buy a policy that is worth ten times your income plus $100,000 per child to address their education expenses. Keep in mind that this rule is extremely general and does not take a deep look at all of your family’s needs.
- Your Debts
It’s also important that your life insurance policy is large enough to cover any debts you might leave behind. Add up all your debts such as your student loans, credit cards debts, and your home mortgage to get a better idea of how much your policy will need to cover.
- Lost Income
Another thing you will have to consider is how the loss of your income will affect your family. Your life insurance policy should also make provision for your lost income. Multiply your annual income by the number of years you would like to replace income for, and this number will also give you a better understanding of how big of a policy you should purchase.
- Funeral Costs
Finally, you also need to make provision for your funeral expenses. With the average funeral costing upwards of $7,000, this expense is not something you should overlook.
These are some of the major considerations you should keep in mind as you determine how much life insurance coverage you need. Do you still have questions regarding your life insurance? Don’t hesitate to contact us at Pierce Insurance Group. Our experts are ready to assist you with all your coverage needs.