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Life Insurance How Much How much life insurance do you need? How much do you want? A quick estimate of how much life insurance you need is to total all your debts and add the lump-sum amount that, when invested, will provide your family with adequate income. See the example below. Five times a current annual income of $30,000, or $150,000, is assumed to provide an adequate income stream for the family. It is then necessary to account for outstanding mortgage amounts, debts, education expenses, funeral costs, and emergency cash reserves, which amounts to $220,000. In other words, providing for all of these objectives will cost about $370,000. Very often, designing a life insurance program also involves filling in the gaps such as ... Now, how much would be necessary for each item? What amount can be counted on from other resources such as investments, cash reserves, pension survivor benefits, existing life insurance, and wages that the family would continue to earn themselves? After calculating this amount, take stock of all your other resources which will offset this need. These resources include income from: Investments Cash reserves Spouse's/dependent's wages Social Security Pension/Survivor Benefits Other sources of income and/or assets Don't overlook insurance you may already own or employer-provided insurance policies. The point is, before going out to purchase life insurance to provide for your family, inventory your existing assets to see what you already have. How much capital do you already have? Our Overview Quick Report can provide a personalized analysis of your status. Next, let's learn about types of policies. < PREVIOUS NEXT> #38599