How Much Life Insurance Do I Need?

How much life insurance do I need

This can be a stressful question to ask yourself, let alone answer. When weighing the options and calculating how much life insurance you need, a lot of factors will come into play. Some of them get overlooked, but there are several basic components to analyze when you do decide to purchase a policy plan from a life insurance provider. It sounds complicated, but it doesn't have to be. This is one of those things that appears complex and convoluted on the surface but with some research, it's not so bad.

Consider Debt

Think about all the debts you have. If you're still paying off a mortgage or student loan and providing the funds for a premium would set you back, you should reconsider. Life insurance will quickly grow more expensive in proportion to the amount of debt you currently do have. This is something to keep in mind before selecting a plan.

Monthly Spendings

Monthly spending is going to play a huge factor in the decision you make with life insurance. There are plenty of software packages available for your computer that will help you hone in on the amount of money you're spending, which you need to know if you plan on moving forward with the life insurance policy. Without know how much you're spending monthly, you're in the dark and opening up a slew of hazardous financial risks, especially if you plan on paying a life insurance premium.

Monthly Savings

Saving money is a good thing, especially when dealing with life insurance. If you're able to set money aside every several weeks and still have something to live off of, you're doing it right. Keep saving and in turn, you will reap the benefits of a life insurance policy. Purchasing one while you can't save is a bad idea, so make sure you can do this first.

Benefactor Considerations

This is one of the biggest things you need to consider when thinking about buying a life insurance policy. After you die, the beneficiaries will receive a lump sum of money along with whatever other attributes you have set up. You need to ask the question, “what will happen to my family members after I die? Will they be able to afford life without me?”. That answer alone will help shape the decision to buy a life insurance policy plan. If you think your loved ones will struggle without your support, then a policy may be the best choice for you.

On Inflation

Some things are prone to the whim and motion of the economy's health. That means inflation may play a large role in the pricing of your policy plan. Take that into consideration before purchasing one; you can easily check up on economic data to via the web.

Above are the basics of choosing a life insurance plan and hopefully they will answer the question of whether or not to buy a policy. Note these key components of your life and compare them to what a policy offers. Odds are a life insurance policy would be useful for you and especially your family members.

← Back to article list