| How much Life Insurance Do I need |  |
 |
| How Much Life Insurance Do I Need? |
There is no precise formula to tell you how much insurance coverage you
need. Some consumer groups recommend five times your gross annual income.
Under this formula, a family with an income of $40,000 might need at least
$200,000 worth of life insurance protection (face
value of the policy).
Some insurance industry organizations recommend a policy paying ten times
your gross yearly income. With this formula, the family mentioned above
would need $400,000 worth of insurance.
Before buying life insurance, assemble your personal financial information
and review your needs. You should consider: |
- Immediate needs at the time of death, such as final illness
expenses, burial costs, and estate taxes.
- Funds for a readjustment period, to finance a move or to provide
time for remaining family members to find jobs or better-paying jobs.
- Ongoing financial needs such as monthly bills and expenses,
outstanding debts, day-care costs, college tuition, support for
elderly parents, and retirement.
|
| You also need to take into account any assets you have, such
as cash; savings; Social Security and pension benefits; other insurance,
including mortgage insurance; and, real estate. Some of these assets will
be available for immediate use, some to finance a readjustment period, and
others may help your family meet long-term, continuing needs. |
Source: Massachusetts Department of Insurance
|
|
 |
For information about Lynch Insurance please contact:
William Lynch |
|
|