How much life insurance you will need will depend on financial and personal circumstances. You will need enough to replace income and cover dependents’ expenses, including any future ones.
- Financial Obligations: If you aren’t sure about your financial obligations, start with considering your debt. If you die with outstanding debt, your survivors may be responsible for it if they cosigned on a loan. You want to make sure you leave enough for beneficiaries to pay off the debt, especially if it’s a home or family car. Be sure to factor in the cost of raising children. If you have dependents, this may mean you need to increase your life insurance policy. If you have kids, you may also want to factor in the cost of college when getting life insurance. Plan what college costs will be and take into account increases over time.
- Personal Considerations: Your age and health not only determine how much you should get but for how long you will want it. The older you get, the less you need because you should have fewer dependents and less debt. As you get older, the more expensive life insurance becomes. So, it’s best to purchase a policy when you are young and healthy to get a more affordable rate. How much life insurance you can afford should be a consideration as well. A life insurance policy isn’t good if you can’t afford it.
An agent at Richards Insurance Agency in Lincoln, NE can help you determine how much coverage to get. It’s good to tally up your resources, which include liquid assets and after-tax income. Then figure out your financial obligations with expenses and debt. Subtract liquid assets from financial obligations, and this is your coverage gap. Your coverage gap is how much insurance you should have.
Contact Richards Insurance Agency in Lincoln, NE to get a quote on life insurance and have your questions answered.