How Much Life Insurance Do I Need?
Life insurance is an essential part of protecting your loved ones. The amount of coverage you need depends on your life stage, responsibilities, and personal goals.
Single
If you're single and don't have dependents, you may need enough coverage to cover any outstanding debts and funeral costs. A general rule is 10-15 times your annual salary.
Example: If you earn $50,000/year, you may need $500,000 - $750,000 in coverage.
Married
If you're married, you'll need enough coverage to ensure your spouse is financially secure if you were to pass away. You should consider your combined income, debts, and long-term goals.
Example: If your combined income is $80,000 and you have a mortgage, aim for $800,000 - $1,200,000 in coverage to cover debts, living expenses, and future goals.
With Children
If you have children, life insurance should provide enough coverage to secure their future and education costs. The amount will also depend on how many children you have.
Example: For a family with 2 children, you might need $1,000,000 - $2,000,000 depending on your income and future expenses (education, etc.).
Life Insurance Needs Formula
Here’s a simple formula to estimate how much life insurance you may need:
Annual Income × 10 + Mortgage + Other Debts + Future Expenses (such as education for children)
This formula gives you a rough estimate, but it’s always recommended to speak with an insurance advisor to get a personalized quote.