Most people start to think about life insurance after they've married and had children. That's because the main goal of buying life insurance is usually to replace income if the buyer's earning power is taken away by death.
The industry standard on how much life insurance you need is five to ten times your annual salary. But, it really depends on several factors such as your age, the ages of your spouse and dependents, your income, and your debts.
Premium rates go up as you age, so it's more cost effective to buy life insurance when you're young, and also allows you to purchase more coverage.
You can use the ages of your dependents and spouse to judge the amount of income replacement they'll need if you die. This will vary per individual as some dependents may need support temporarily but others could have special needs that require support for life.
If you're just starting out, there will be many years of income to replace versus someone who's near retirement, or has no debts. A 50 percent income replacement is a starting point suggested by some experts, but again, this varies by individual.
Your mortgage, car loans, and other debts should be included in your insurance planning. Also, factor in future seduction for your children.
Life insurance is an important investment that can help substitute your income and maintain your family's current standard of living upon your death.
If you'd like to learn more about the right life insurance policy for your family's needs, give us a call or drop us an email.
If you have any questions or would like help figuring out what the best options for your life insurance are, don't hesitate to reach out.