How much Term Life Insurance do you need at a given income?
The first thing you should do is head over to our Term Life Insurance Needs Calculator to get an estimate of how much life insurance you need based on your income, beneficiaries, and financial situation.
Next, you need to understand the factors at play when figuring out how your income (and thus the way you live) affects the amount of life insurance you should get.
1. Final Expenses
Make sure your term life insurance policy will cover your final expenses including a funeral and burial - Start around $15,000 for this.
2. Mortgage and Other Debts
Sum your major debts including your mortgage, car loans, student loans, personal loans, etc. It's important that you cover the costs of these major debts since you'll be passing them along to your beneficiaries.
3. Education Expenses
Think about your current plans for your children's education. Total up costs for any private education or preschool, tutoring, and, especially, college. Keep in mind that college costs, in particular, are greatly impacted by rising tuition costs. Include these expenses in your calculations.
4. Income Replacement
We recommend that you get 10x your income when you get term life insurance. For example, if you make $100,000, we recommend you get $1,000,000 in life insurance ($100,000 x 10).
Don't hesitate to contact us with any questions you might have!