Life Insurance: Top Things To Know - Insurance for Everything



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			Life Insurance - How much coverage do you need?
			If you're going to buy life insurance, make sure you've got enough
			There is no simple answer to how much coverage is enough. Some financial planners say at least five to seven times your gross annual income. Others argue that you need twice as much in face value. That would mean a person making $50,000 a year should have anywhere from $250,000 to $750,000 worth of coverage or more. Remember, the sole purpose of life insurance is to replace your income in case you die, so that your dependents can maintain their current lifestyle. Factors to consider include whether the surviving partner will have childcare expenses if one partner is out of the picture. Do you have other assets on which to draw? Will your children be out of the nest soon? These, and many other factors, influence the decision on how much coverage you need. Buying a whole life policy doesn't necessarily mean you are fully insured. Because of the investment component of whole life, the policies are much more expensive than term. Don't simply buy less coverage, as it defeats the purpose of buying insurance in the first place: to cover dependents. Next, you've got to figure out how long you need the policy.
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