How to Choose a Life Insurance Coverage Amount

 


How to Choose a Life Insurance Coverage Amount; 
A good rule of thumb for estimating how much coverage you need is to:

  1. Add up all the expenses you want to cover, such as income replacement for your work, a mortgage and children’s college expenses.
  2. From that, subtract the amounts that your family could use to cover those expenses, such as savings and existing life insurance. Leave out retirement savings if your spouse will need that later on.

The resulting number is how much life insurance you need. It may look high, especially if you’ve factored in income replacement for many years. Still, life insurance quotes are free, so it doesn’t hurt to price out the coverage you need. If it turns out to be unaffordable, you can buy what you can afford now to lock in a good rate. You can buy more later, just be aware that several years from now your rate will be based on your older age and any health conditions you’ve developed.

Here is a calculator to help you estimate how much life insurance you will need.

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