When thinking of life insurance no one ever knows how much they really need.
The thought of that scares people away. Why? It's because people miscalculate the amount of life insurance they should buy.
There really isn't a set amount of life insurance to purchase. It honestly all depends on how much money your family needs after you're gone.
Some tips to determine the amount of life insurance that is right for you:
To evaluate your family's needs. Medical bills, debt that needs to be paid off, a household mortgage payment. Also funeral costs.
- Consider future financial obligations. Consider paying for college for your kids and making sure to have enough to cover future financial responsibilities.
- Tally up the resources. Add up you and your spouses income and the balances in your 401(k)s, college savings plan, and emergency savings.
That should help determine the amount. You want to leave your spouse and family enough money so that they don't worry about medical bills and debt after your death.
You can also use the "Life Insurance Needs" calculator at http://www.lifehappens.org/ to help you figure out the amount.
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