It really does vary from one person to another but generally speaking you should calculate your long term financial goals and aspirations and then subtract your assets. The difference will be the amount of life insurance you should acquire to fill in the financial gap in the event of one's passing.
Here are some key points to consider when thinking about right amount of life insurance coverage.
1) What is your annual income? Take this number and multiply it by 7-10 times to get a sense of how much income replacement you will need for your family to carry on a “normal lifestyle”. Our recommendation is that both parents seek the same amount of coverage whether both parents are working or not. Most of the time parents forget to place a value on the stay at home spouse and their duties. What most find is that if you were to pay for the services of child care, pick up and drop off or even meal planning, one would find these costs to be tremendous to hire someone full time to replace these duties.
2) How many kids or dependents are there? And do you plan on sending all of them to college? Most parents do want to provide college cost or at the very least a big portion of the costs for their kids. Your normal 4 year state school can easily cost $200,000 per child. Naturally you would multiply this amount by each child and quickly you find a large number is needed right off the bat.
3) What is the Mortgage balance of your home or homes? In the case of someone passing unexpectedly, most times the mortgage payment is the highest bill that will still come in every month due on the 1st. The financial burden could be greatly alleviated if the mortgage balance were to be paid off in lump sum or even in monthly payments. Simply add the total balance of all real estate properties to calculate this figure.
4) Final Expenses or Debt One should calculate costs for funeral expenses and also any other debts that you may have. This number usually varies from person to person or family to family.
Once you have determined the total figure of the above topics you will then be able have a solid ballpark number of which to start planning.
The final step that remains is to contact one of our insurance specialists to fine tune the specific number for you and your family. Utltimately everyone has a specific need and its best to have the assistance of a professional. The next steps involve finding a reputable company at a reasonable price. Contact one of our life insurance agents at The Ascension Group to schedule a consultation today. Call us at (214) 277-9497 or Email. Our agents take care of all of this for you at NO additional cost. Thanks again for visiting us and look forward to connecting with you.