Choosing a life insurance policy and value can be difficult for the consumer. How do you factor in all the possible final expenses plus what you would want to be left over for your family’s needs. If you have no dependents and no outstanding debts, you may only need a nominal amount. But, if you have a home mortgage, along with some consumer debt and multiple beneficiaries, then acquiring the proper amount of coverage is of utmost importance. So how does one arrive at the magic number that will sustain their family if they pass?
The calculation in determining the needed amount of Life Insurance includes four steps. First determine the amount of money needed to cover immediate bills and your funeral cost. Second, figure the amount needed to pay off your home mortgage, or to have sufficient cash for your beneficiary to pay the monthly mortgage. Third, add the amount of income that would need to be replaced and for how many years. Fourth, you might want to leave some cash for your children’s or grandchildren’s education.
Following the steps above will help you get a general idea of the amount that you need. Working with a Life Insurance Specialist allows you to be sure you have accounted for your future expenses and have not overlooked anything. If you have questions regarding Life Insurance, please give us a call!