Your life insurance needs will change
as you grow older and encounter different financial needs and goals.
While every agent has his/her own ideas about how to calculate a
dollar amount, ConsumerQuote USA has combined these methods to come
up with simple rule of thumb for the main income earner in a family.
Keep in mind that each individual situation is unique.
| Lifestyle |
Multiplier |
| Little or no financial
burden. Low mortgage or rent payment, no dependent children,
single, very low overall level of debt. |
1-3 times
annual income |
| Surviving spouse
will work, low mortgage or rent payment, little debt, no dependent
children. |
3-5 times annual
income |
| Surviving spouse
will work, moderately high mortgage payment, no excessive debt,
some money saved. |
5-7 times annual
income |
| Large amount of
financial burden, new home, young children, high mortgage, surviving
spouse wants choice not to work. |
7-10 times
annual income |
Using the above
as a general guide, it is apparent why many Americans feel they
have less than adequate life insurance coverage. For example, if
you make $25,000 a year and you have coverage for $50,000, your
policy will support your family for less than 2 years at their current
lifestyle.
Do you want
to burden your family with excessive bills and the large expenses
of raising children, paying a mortgage, or retirement funds? If
not, then buy the coverage you really need!
Note: This
is to be used as a simple guide. For a more accurate analysis of
your insurance needs, consult an independent and impartial financial
advisor.
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