How to Determine the Amount of Life Insurance You Need

Purchasing life insurance can be one of the most important gifts you give to your family. Strike a balance between what you think your family will need and what you can afford to buy.

Things You'll Need

  • Term Life Insurance
  • Whole Life Insurance
  • Life Insurance
  • Accounting Services
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Instructions

    • 1

      Calculate your after-tax income and then count the number of years of life expectancy remaining.

    • 2

      Consult a reputable agent and use an insurance company's computer program to plug in numbers and generate a figure.

    • 3

      Add outstanding debts, such as your mortgage, car loan and credit card debt.

    • 4

      Remember to allow for any medical costs and funeral expenses.

    • 5

      Remember that your family may also benefit from pension and Social Security benefits.

    • 6

      Consider your spouse's ability or desire to earn income and consider extra child care costs.

    • 7

      Remember the special needs of a disabled child or a parent whom you support.

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