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How Much Life Insurance Do I Need?

2011 December 12

Dave typically recommends that families carry 10-12 times their income in term life insurance coverage. This level of protection will generally allow for the continuation of the financial lifestyle for the remaining family members and allow them to pay off debts, fund education, cover the costs of unexpected needs, and pay for final expenses. The exact amount you should carry will, however, depend on your personal situation. For example, if you are single and without children, your primary concern would be the amount of debt your estate would be responsible for, which would likely require less coverage. If, however, you have young children and significant debt, this higher amount would be appropriate. Any of our team members at Zander Insurance can help you further determine your specific insurance needs.

If 10-12 times your income in coverage is not within your budget, Dave recommends lowering the death benefit to an amount that would still provide financial protection – something you can get by on for the near future while trying to address the reasons for the higher cost. You can also shorten the level guaranteed period to a 10-year term and increase the coverage amount. Your debt and savings situation will determine whether a lower face amount or a shorter term period is the most beneficial, cost wise.

Now that you have an idea of how much coverage you need – what about term length? Dave recommends a 15 or 20-year level term policy. This is a good amount of time during which you can pay off your debts and build your savings, decreasing your need for life insurance. By the end of that term, you shouldn’t need life insurance at all! That’s why term plans make the most sense: they are cheaper, and you only pay for them during a selected term – not your whole life.

This is why at Zander, we only offer level term life insurance plans. Compare term life insurance rates online or call us at 1-800-356-4282 to speak to a Guide.

One Response leave one →
  1. zanderins permalink*
    October 17, 2012

    I would recommend visitinng our website and clicking on the “Insurance Tips” section as well ss the “Term vs. Cash Value” link which will provide additional information.

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