When purchasing life insurance, you want to make sure that your spouse and children are covered if you were to die today. A simple calculation is to multiply your annual income by the number of years to retirement. For example, $60,000 a year times 30 years to retirement equals $1.8 million in insurance benefits to be paid. You will need to purchase $1.8 million in insurance to cover your family. You also want to take into consideration future needs, such as college, health insurance coverage if your family is covered by you and unexpected emergencies. Adding these in will increase the amount of life insurance needed.

On the Other: Do You Have Other Savings & Investments?

However, if you have other investments and savings accumulating, the amount of life insurance necessary may be lower. If your spouse is working, his income can be subtracted from the total amount of coverage needed. Remember to include any benefits that you pay for through credit cards, banks, other associations and your employer that you will receive if you are to pass away.

Bottom Line

Carefully take into consideration all income and expenses and purchase what you need. The proper amount of life insurance will differ from family to family based on personal needs, expenses and future goals. Purchase what you can afford to cover your family in case of your death.

Source:

Abbys Guide: How Much Life Insurance Is Enough?

Good Financial Cents: How Much Life Insurance Do You Need To Buy?

Take Away The Worry: How Much Life Insurance is Enough? (Life Insurance 101)

Resource:

Online State Farm: Life Insurance Needs Calculator

Smart Money: How Much Life Insurance Do You Need?

Lamb Dalit: How Much Life Insurance Is Enough?