So you’ve done your research, there are some fairly standard answers when it comes to how much is recommended for you to have in life insurance coverage. A popular rule of thumb is to take out life insurance coverage about five to 10 times your salary. However, when you get into the fine details of your needs, the coverage qualifications may be different.
One of the most important things to keep in mind when you are considering life insurance is how much money you will need to replace your salary at home. When your salary is not coming in, you will need to calculate your needs and see how much money you will need for a certain number of years.
Another consideration is the idea that with a large death benefit, $1 million for example, a family could live on the interest for a long time. If you calculate 5% of $1 million, a family would have $50,000 per year.
If your children are in their teens you may only need a few years of coverage. However, if you have younger children you are going to want a policy that provides coverage for a longer period of time.
We hope this installment of Life Insurance Thursday will be helpful when you are deciding on a life insurance policy. If you have any questions, please call a local independent agent here at Community Insurance & Associates.