How Much Life Insurance Do I Need?

Life insurance is the must have insurance. It is because you need a long term investment planning. One of the benefits of life insurance is to replace the income that you invest during your life in your final expense. It can also be benefit for your family after your death because they need much money for your funeral as well as their future needs. So, we need to buy life insurance. However, how much life insurance do I need? It will depend on many factors including your income. In this article, we will discuss about it.

Do You Have Enough Income?

There are many cases where people have enough income but they still buy life insurance. Will it be benefits? For example, if I have enough salary for daily needs and even for my final expends, how much life insurance should I buy? In this case, you need not life insurance because you do not need income replacement in your final expends or after your death. So, it is clear that how much life insurance do I need depends on my own income.


What Is Your Purpose?

What is your purpose of buying life insurance? Mostly, people buy life insurance because they want to give inheritance to their family after death. Some people also want to give charitable contribution. With those purposes, you will get it all by buying life insurance. Commonly, people who buy life insurance are those who have many dependents. With your life insurance, it means you guarantee their future life. So, how much life insurance do I need? It depends on my dependents, too. The more dependents I have, the higher life insurance I need.

Hidden Income Replacement

How much we need to buy life insurance will also be affected by hidden income. If you usually feed your family with your salary and then you can save money from your hidden salary, you need to buy life insurance. Hidden salary can be gotten from some sources such as the extra fee from your company, health insurance from your company, etc. After you die, you will not get it all. So, for the future plans, how much life insurance do I need should customize to the hidden income I get. It purposes to replace that hidden income after death.

Other Sources of Income

Does your family have other sources of income? If they do, it is your own choice to buy life insurance or not. If you decide to buy it, how much life insurance do I need? It depends on the other sources of income. If the other sources of income are enough to fulfill the needs after your death, it does not matter. However, if you are not sure, you need to buy the higher life insurance. The most common source of income replacement besides life insurance is social security survivors’ benefit. Learn more about life insurance tips at www.tellthem.xyz.

Calculating How Much Life Insurance Needed

After you know all those factors that affect the needs of life insurance, you need to know the best amount of life insurance to buy. The cost of life insurance needed is different for different people. However, there are many life insurance pundits recommend that we need to buy life insurance that is equal to a multiple of salary we get. For example, I get $ 2,000 per month. So, how much life insurance do I need? I can choose the multiple of it like I want to buy life insurance that is equal to 10 times of my salary.

That is a good tip and idea. Anyway, this tip is ruling out the other sources of income as well as hidden income. So, if you calculate what you or your family will get, it will be higher. Different people have their own considerations and calculations so that you can also decide how much you will buy your own life insurance. So, how much life insurance do I need should depend on my own income, other sources of income, and my dependents.

That is all what to know related to how much life insurance do I need. There are many things that you have to know so that you can prepare to calculate it from now. Hopefully this will be a useful reference especially for you who are interested in life insurance.