How Much Life Insurance Do You Need?

Welcome readers of the Peninsula Daily News! Life Insurance can be a complicated subject. You may be wondering how much life insurance I need? That is a great question with a lot of variables that are unique to you and your family. I have found that there is no ‘right’ amount of life insurance to own. Rather, it is what you want to have happen financially if you were to die prematurely. Typically, these wants fall into 3 major categories.

This family needs life insurance

Mortgage Life Insurance

Debt reduction is something you should consider when planning for life insurance. Think about would you want your spouse or family to be able to pay off your mortgage in the event of your death so they are not straddled with the payment? Life insurance provides income-tax free money to the beneficiary to pay for these types of scenarios. Other common debts include credit cards, student loans and Home Equity lines of Credit.

Income Replacement

If you are the sole breadwinner in your family with children, what happens to your children if you are no longer there? By providing enough life insurance to replace your income, you can be sure that they will be able to maintain their standard of living. Consider how much after-tax income you bring in each month minus the debt payments that will hopefully be gone. This will give you a starting point of how much you need to plan for. Other factors to consider are the age of your children and how long you want to provide for after you are gone.

College Savings Plan

Do you want your children to attend college without the burden of graduating with student loans? Depending upon how old your kids are and the school they wish to attend, you may need to budget $250,000 or more per child considering the inflation rate on attending college. There is a great website www.savingforcollege.com that will give you a lot of great information on how much college will cost you in the future.

These are just a few areas to consider when getting a life insurance quote. If you would like help going through your personal situation and determining the correct amount for your family, please contact me at 360-452-9200

Want more information? Please visit my official Allstate Agency Website to get more information on the Allstate products and services I can offer in Port Angeles, Sequim or anywhere Washington State.