How much life insurance you need are depends on Basic Factors like:

  1. Time Left until Retirement – Many peoples’ biggest asset is their ability to work and earn income.  Since most breadwinners purchase life insurance to replace that lost income in an unexpected death, you should consider how long you need to or plan to work.  If you only plan working another 10 years, you may not need more than 10 years of life insurance coverage, and so on.
  2. Spouse’s Income Potential - If your spouse does not currently work, would he or she be able to if need be?  What is his/her income earning potential based on experience and education?
  3. Consider Your Debt – It’s common to purchase life insurance to cover a mortgage, credit debt, or business loan.  Consider how long the term of payments is.  If your mortgage will be paid off in 30 years, do you really need whole life coverage?  Why not just 30 year term?
  4. Consider Your Savings & Investments – If you are actively saving money, adding to your 401K or IRA, etc., and your debts are decreasing as mentioned in #3, your need for insurance may greatly diminish in a short period of time.  Please consider all of the above when determining how much life insurance you need.