What subject do people really hate to talk about? Accounting? Taxes? No, that would be life insurance. The topic of buying something that you hope will not use soon can really stress some people.
Recent polls suggest most people are underinsured or over-insured. If that is the case, how do you make sure you have what is right for you? How do you make sure that you have the life insurance coverage you need?
How Much Life Insurance Is Enough?
There are online calculators that calculate information on your situation and give you a number in dollars. The general rule of thumb is 10 times your annual salary, but often this is wildly off the amount you need. As there are a number of calculators online, you can find answers to your questions by looking at them to see your situation from different points of view.
How Much Life Insurance Is Too Little?
This again depends on your assets and how much you have saved. Most people are also lacking in disability insurance. Both of these life insurance needs should really be taken together because they go in tandem. If you are well life insured but become disabled in an accident, that will not help your family.
How Much Life Insurance Is Too Much
If you have life insurance to the point where, if the capital is invested, it will pay annual interest way beyond the amount necessary to care for a family or loved one or to provide a pension.
How Much Life Insurance Is Just Right?
You should carry enough so that if invested conservatively, it will generate enough after-tax income to care for your family, whichever way the proceeds need to be used. That’s why this product is called life insurance.
The Right Amount Of Life insurance
The amount of life insurance you should carry is a very personal matter. All families differ in their needs. And not everyone believes their heirs should inherit wealth beyond the bare necessities. Some people have the attitude that as they did not receive any more than the basics, why should their heirs be any different.
Whatever your attitude, one thing that will help your family, however small, is a life insurance policy.