“How much life insurance do I need” is a big question we get from clients all the time. This is an important question and the answer really depends on your situation, your family, your income and your goals. In this video Robert will give you a simple rule-of-thumb that will help figure out how much life insurance you need.
Two main things you want to do for life insurance is
– pay off your debts,
– and make sure there’s enough money to take care of your family if you’re not there.
First off, add up all your debts. This includes your mortgage, credit cards, loans etc. This will be your base amount to cover, so you don’t leave liabilities behind for someone else to clean up.
Secondly, you want enough money to take care of your spouse and kids if you’re gone. This usually means replacing your income, so your family can stay in the house and keep living their current lifestyle. A lot of our clients want to make sure their kids education is paid for, so generally count 10 to 20 times your annual income to be able to achieve this. If you add the two numbers together you get a general idea of how much life insurance is right for you.
Pay off all your debts, plus how much you want to leave behind to take care of the family. There’s no right or wrong answer to this question, but this should give you a general idea of how to calculate how much life insurance you need.