How much life insurance do I need?

The amount of life insurance you need depends on your circumstances and lifestyle.

Getty Images

Life insurance, like most other types of insurance, is something that hopefully you won’t have to deal with very often. When you get it right, it’s just another bill you pay for security and peace of mind. But the importance of having one – and having the right amount – cannot be understated.

As with other types of insurance, terms, conditions and conditions vary. The right amount for each person depends on their financial situation.

If you don’t have life insurance – or want to get more – now is a good time to take action. Don’t hesitate and get a free estimate today.

How much life insurance do I need?

The amount of life insurance you need depends on your circumstances and lifestyle. There is a list of questions you need to answer to help calculate a specific number:

  • Are you the sole earner? If so, then you will need more support than if you were married with two sources of income.
  • What are your long-term goals? Are you financially stable or do you have years to pay for expenses such as your children’s college education? Where you are in your life will help you determine how much life insurance you need.
  • How healthy are you? Life insurance companies will want to know your health before they will agree to insure you. But you also need to be honest about how you feel and what your plans are in the event of an emergency. It is better to be safe than sorry and this may mean taking out more life insurance than you think you need right now.
  • How much debt do you have? And who will pay you when you pass? If your house is paid off and the kids are grown and out of the house you may need less insurance than someone with other issues.
  • How do you and your family live? Of course, insurance can cover the basics but if you do it yourself – and you’re used to living (and being liable for) high costs – your insurance coverage should be set accordingly.

If you don’t have life insurance or don’t know if you have the right amount, do it today. You can find the latest information on providers, review local companies and compare prices now.

To help determine how much life insurance you need, it’s important to understand what life insurance is and why it may be important to you and your family.

What is life insurance?

In short: life insurance is insurance that pays you, as an individual, when you die. Just like car insurance covers your car in the event of an accident and home insurance covers damage or repairs to your home, life insurance pays you money in the event of your death. In exchange for payments made directly to the insurance company or through other means (such as an employer), the insurance company will pay your beneficiary the agreed upon amount in the event of your death.

You don’t have to die to pay, though. Depending on the insurance policy you have, certain circumstances (such as terminal illness or serious illness) may also trigger a payment.

There are two main types: term life insurance (a predetermined period of time for which you will be insured) and whole life insurance (which remains in effect for life).

Why do I need life insurance?

You need life insurance for the same reason you need all other types of traditional insurance: to protect you and your family in the event of a disaster. The financial burden that the death of a loved one can bring can be greatly reduced if the person has life insurance and was paid the appropriate amount.

In short: There is no life insurance policy that everyone should have. It depends on a number of factors (including how much you’re willing to pay each month).

Not sure how much life insurance you need? An online financial advisor can help know how much money you can afford for you and your family.