How much life insurance should an individual own?

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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.

Category: Life

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