A rough “rules of thumb” suggest an amount of life insurance equal to 6 to 8 times your annual earnings. However, many factors should be taken into account in determining a more precise estimate of the amount of life insurance needed.
Important factors include:
- Income sources (and amounts) other than salary/earnings
- Whether or not the individual is married and, if so, what is the spouse’s earning capacity
- The number of individuals who are financially dependent on the insured
- The amount of death benefits payable from Social Security and from an employer sponsored life insurance plan
- Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need), etc.
For a program that calculates all the above for you, give us a call or drop us an email. We always recommend that you also talk to an insurance advisor for a precise calculation of how much life insurance you need. Give us a call or call our Financial Services Partners – Brooks Financial.