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 In More About Term Life Insurance

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 standard of living affect 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. Your estimated costs would start around $15,000.

2. Mortgage and Other Debts

Add up your major debts including your mortgage, car loans, student loans, personal loans, etc. It’s important that you can cover the costs of these major debts, since you’ll be passing them along to your beneficiaries.

3. Education Expenses

Think about your plans for your children’s education. Total up the costs for any private education or preschool, tutoring, and especially college. Keep in mind that college costs, in particular, are greatly affected by rising tuition costs. Include these expenses in your calculations.

4. Income Replacement

We recommend that you plan to replace 10 times your annual income when you get term life insurance. For example, if you make $100,000, we recommend you buy $1,000,000 in life insurance ($100,000 x 10).

Universal life insurance, a 1980s sensation, has backfired.