Life insurance is an affordable way to protect the people you love and care about most. When you start exploring your life insurance options, you’ll have a lot of choices to make—everything from the type of coverage to the company you get your policy from.
The right amount of life insurance needed will vary from person-to-person, so deciding how much life insurance you need can be tricky. Many people find that 10-12 times their income is enough coverage, but this simple approach might not always provide the support you’re looking for. Below are three main points to consider as you explore your life insurance options.
How Much Life Insurance You Can Afford
When thinking about how much life insurance you can afford, start by taking into account your existing expenses, any potential future expenses (such as the cost of raising a child), and current debt and liabilities. You want to make sure your beneficiaries and dependents who currently rely on your income for some of these costs are able to maintain any outstanding payments while continuing to live without worrying about a potential financial burden.
Who depends on your financial support?
Whether you’re buying life insurance to make sure your children are financially protected throughout their childhood or to protect your spouse until retirement, it’s important to consider all who might take financial hit from the loss of your income. Your spouse, children, extended family, business partners or people who’ve co-signed on loans—the more dependents you have, the more life insurance coverage you should consider.
Future Financial Needs
Purchasing life insurance as early as possible can often be financially beneficial, because life insurance rates tend to be more affordable the younger and healthier you are. This can help you ensure your future needs are covered sooner than later and can potentially save you money in the long run. For example, you may want to safeguard paying for a future college education for your toddlers, ensure your spouse can pay off a home loan and make sure your final expenses will be covered in the event of your passing.
At SelectQuote, we can help you determine how much life insurance might be right for you and our life insurance calculator is a good place to start. When it comes to weighing all your options and sifting through the fine print, SelectQuote can help simplify the process. In just minutes, we can share life insurance coverage and cost comparisons from some of the most trusted insurance companies. We’ll take the time to get to know your needs and find the best life insurance policy options available to you.