Topic: INSURANCEWho is affected: COUPLES & MARRIAGE, STARTING OUT, PARENTHOODDEGREE OF DIFFICULTY: ModerateWhat you'll need: ANNUAL SALARYWhat you need to knowThe main consideration when deciding how much life insurance to buy is: How much will it take to meet your loved ones' needs should you pass away?Every family is different, and will have different needs in the wake of a breadwinner's demise. Here are some questions to help you decide how much coverage to carry:How long will your family need financial support? Want to make sure your children are taken care of into adulthood? The younger your children, the more you'll need. If you're the sole breadwinner, take that into consideration. Think it'll take a spouse five years to get a new career off the ground to replace your income? Plan accordingly.How much income will you need to replace? How much money does your family need to cover expenses on a yearly basis? Your current salary is a good guide to how much your family needs to get by, but don't forget future expenses like education, retirement and medical expenses.Do any of your dependents have chronic health problems, special needs or disabilities? Dependents in need of long-term care will need a corresponding amount of financial support.Step-by-stepThere are two basic approaches to deciding how much coverage to carry:1. Multiply your salary by the number of years you think your family will need.2. Choose an amount that would provide enough to support your family into the future.Once you've decided which approach is right, use the work sheet "Shopping for life insurance" to help find the perfect life insurance policy.Related linksTools & resourcesTipsHow much life insurance do you need?6 ways to trim life insurance costsJust the facts on life insuranceDo you need life insurance?7 reasons to review term life coverageProtecting life insurance policy claimsWhat to ask when buying life insuranceCompare life insurance ratesVideo: Life insurance for daredevilsWhat type of life insurance do I need?Although they'll probably never need it, the stakes are high for your loved ones when it comes to life insurance. It may be worth it to have a Certified Financial Planner help you decide how much and what type of life insurance to carry. advertisementRelated Links:How do I: Find the best deal on auto insurance?How are term life insurance premiums set?How to cut homeowners insurance costs Related Articles:Need travel insurance?Risks of premium financing Quiz: Need more insurance?
Every family is different, and will have different needs in the wake of a breadwinner's demise. Here are some questions to help you decide how much coverage to carry:
Bankrate wants to hear from you and encourages thoughtful and constructive comments. We ask that you stay focused on the story topic, respect other people's opinions, and avoid profanity, offensive statements, illegal contents and advertisement posts. Comments are not reviewed before they are posted. Bankrate reserves the right (but is not obligated) to edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused. We do not permit the inclusion of hyperlinks in comments and may remove any comment that includes a hyperlink.
Compare multiple quotes in just 6 minutes
Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.
Curious about your inherited health risks? Some insurers would relish a look at your genetic tests.
... Read more