How Much Life Insurance Do You Need?
Subscriber request for calculating your life insurance coverage needs
If you have kids but no life insurance, 99.999% chance you suck. Only if you are so wealthy that your kids are set already, do you get a pass. To say life insurance is important, is an understatement, especially if you have dependents. But far too many people put off getting life insurance and/or have insufficient coverage. But I don’t blame you as there is a lot going against life insurance…
Confusing AF
Feels expensive
A hassle to get (you have to give blood, saliva, or urine, and get a medical exam - although the industry is trying to move to a more simplified approach to avoid these unpleasantries)
You don’t get to see the benefit (since you know, you are dead)
There are a ton of products to choose from (again confusing) and each company has a slightly different version of each product
You need to go to an agent who is selling it
There is a ton of jargon and rules
So yes, it isn’t a great experience or something that people look forward to doing. There are numerous insurance posts in this stack to help get you started on understanding some basics about life insurance (See links):
[Note - If you know nothing about life insurance, give these posts a read (many are free) so this makes sense to you.]
One of the major barriers to purchasing life insurance that I haven’t hit on in the previous posts, is people just don’t know how much life insurance coverage to buy. They get frozen in paralysis analysis being worried if they are getting too much or not enough and get overwhelmed and quit.
It is probably one of the most common questions I get in the DMs around insurance - I just had a kid, how much life insurance do I get?
Well let’s cover the basics of required coverage amounts and I’ll provide a few different methods for actually calculating your life insurance coverage needs.