How Much Life Insurance Do You Need

How Much Life Insurance Do You Need

How Much Life Insurance Do You Need

Life insurance is something that everyone needs. Many people who purchase insurance under estimate what they truly need which leaves their family under insurance.

A life insurance needs calculator is a great way to determine what your insurance needs are based on several factors. This article will attempt to identify these factors.

Cost of a Funeral

Setting aside enough money for a funeral or cremation is important. Today, you can expect to pay on average $7500 for a standard funeral. Some services can cost over $10,000 depending on many factors such as funeral director fees, casket, headstone, and plot. Cremation costs are significantly less averaging about $1500.

Amount of Non-Mortgage Debt

When a sudden or unexpected death occurs, many families opt to payoff all their secured and unsecured short term debts. These debts include auto loans, personal loans, credit card balances, and any known medical expenses.

Establishing an Emergency Fund

Many families like to set aside an emergency fund equal to 6 months of income. If you earn $3000 a month then you would set aside $18,000.

Establish a College Fund

Many families opt to create a college fund for their children in the event of an unforeseen death. The average cost of college is approximately $50,000.

Amount of Income Needed

Many spouses want to make sure that their significant other is taken care of financially. By estimating the annual living expenses, spouses annual income, estimated social security benefits, liquid assets like cash, savings, certificate's of deposit, and investments, net worth and anticipated investment strategy you can estimate how much money your family will need moving forward.

Final Thoughts

Knowing what your life insurance needs are is an important step in the process of buying life insurance. This information can help you take care of your family in the years ahead.

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