How Much Life Insurance Do I Need?
So you’ve made the decision to purchase life insurance. Now it’s time to determine just how much you need. Unfortunately, there’s no one size meets all when calculating coverage amounts. But NRA is here to help. You can start by taking a look at the following tips … or visiting our interactive Needs Calculator.
Consider Your Annual Salary
If your family depends on you for financial support, consider life insurance to replace your income. Many experts recommend you have coverage that’s at least five to seven times your annual gross salary. But depending on your family’s situation, you may need more. It’s important to take into consideration how much your family will need to get by … and for how long.
Look at Your “Hidden” Benefits
When calculating your income, look at more than your salary. Consider other benefits such as your health insurance and 401(k) plan matching. According to the Insurance Information Institute, these two often forgotten expenses can add up to $2000 per month. Consider, too, any other sources of income. Keep in mind, Social Security could pay as much as $2,400 per month for a family of four in a single-income household with a 36-year-old’s $36,000
Determine your Goals
The reason you are buying life insurance determines how much you should purchase. If you have dependents, you’ll want to make sure you have enough to meet their current and future needs … plus cover funeral and medical costs and other bills you may leave behind. Consider housing costs, living expenses, and education costs, if your family is young. If your children have already left the nest, your insurance should be enough to help your spouse live comfortably and have the funds to cover rising medical costs and other expenses. Or perhaps, you want to support a favorite charity or leave a gift to someone special to you.
Our Needs Calculator can help you determine how much coverage you need. Just go online and answer five simple questions about your financial situation and estimated future expenses. It’s easy. The calculator includes guidelines for typical annual expenses amounts in each category. Once you complete it, you’ll receive a recommended policy amount — immediately.
Then you can go to Life Insurance Central – a place where you can compare plans and get rates. A licensed representative can help you find a company and policy that’s right for you. Call 800-756-6452 ex 9515 or visit us online today.