How Much Life Insurance Do I Need?

Did you know that 38% of Americans think they would feel financially strained after the death of the primary wage earner within a month of their passing? When you really consider all of the things that the proceeds from a life insurance policy will need to cover, you can see that your actual need for coverage is more than likely 10 to 15 times your gross annual income, if not more.

When it comes to taking out a life insurance policy, the most important part is figuring how much coverage you will need. Because everyone’s financial circumstances vary, there is no one size fits all answer to this question. While seeing amounts like $250,000, $500,000, and $1 million might seem like a lot of money, you have to ask yourself if these amounts will be enough to pay for a funeral, settle credit card debts, and support your loved ones for an extended period of time.

To figure out how much your insurance policy should be worth, you will have to estimate what the immediate needs of your family members are, as well as any ongoing and future financial obligations that will impact them. After that, add up the resources your surviving family members would be able use to support themselves. This includes things like:

  • Your spouse’s and other family members’ income
  • Accumulated savings
  • Insurance policies you already own
  • Investments

The difference between your current and future obligations, and your family’s earrings, savings, and investments is what you will need for life insurance.

Although this mathematical equation might seem simple, coming up with all of the data to input can be a tricky task. You will also need to account for the effects of inflation and how much you anticipate your investments will generate. Luckily, you can turn to our team of experienced insurance administrators to get help conducting a thorough analysis of your family’s needs. We can assess your situation and determine the right amount and type of insurance that you need to make sure your loved ones are protected after you pass away.

Life insurance funds can cover the following types of expenses:

  • Funeral costs
  • Mortgage
  • Uncovered medical expenses
  • Car loans
  • Taxes
  • Estate settlement costs
  • Clothing
  • Housing
  • Food
  • Utilities
  • Insurance
  • Transportation
  • Health care
  • College
  • Retirement

Talk to an Atlanta Insurance Administrator Today

At Insurance Specialists, Inc., we have been committed to helping clients find the right coverage for more than 50 years. We strive to offer the most competitive rates for the insurance products we offer, without compromising continuity of coverage and consistency of service.

If you are thinking of purchasing a new life insurance policy, call (888) 451-0883 to find out how our Atlanta insurance administrators can assist you today.