How Much Life Insurance Do I Need?
When considering life insurance, it is important you choose the right level of cover for you and your family’s needs. Think about your financial commitments and how long they last, taking into account the following factors:
- Any debts you have
- Your children’s future education costs
- How much an ongoing income stream would cost, and
- Providing for any major future purchases
Term life insurance as a stand-alone product is often surprisingly affordable and provide you and your family with peace of mind. It is common for people to easily afford life insurance equal to 10 times their salary.
Try out our life insurance calculator to discover what a good amount for your circumstances might be.
Life Insurance Case Study
- Situation: 35 year-old couple with two young children and a $350,000 mortgage with the father earning $90,000 a year and the mother providing full-time home care. One parent dies unexpectedly from a heart attack.
- Life Insurance of $750,000 allows the remaining parent to pay off the mortgage, leaving $400,000 to be invested and provide an income stream to the remaining spouse and children.