Even after you have chosen life insurance in Audubon, you still have some decisions to make. Most importantly, you need to determine how much life insurance your family needs.
Debt and Final Expenses
Calculate all of your outstanding debt except for your mortgage. Add your estimated funeral expenses. For example, you might have $15,000 in credit card debt and expect a funeral to cost another $15,000.
Think About Your Income
Most people base the familys need for income on the age of their youngest child and when they will graduate high school. If you have a 2-year-old child, you will need 16 years of income. In this situation, if you make $60,000 per year, you would multiply it by 16 and get $960,000.
Know Your Mortgage
So far, youve added $15,000 in credit card debt, $15,000 for funeral expenses, and $960,000 for living. How much do you owe on your mortgage? Let’s say you still owe $100,000. Add that in, too.
Don’t Forget College
Most people add in $100,000 per child. Add this amount to your credit card, funeral expenses, income and mortgage.
Your Current Liquid Assets
If you add up the amount above and base it on one child, you need a policy worth $1,190,000. Do you already have a policy for $500,000? Do you have $20,000 saved in the bank? Subtract them and you’ll see you actually need $670,000.
Determining a policy amount can be complicated. Don’t worry if you’re still unsure. An agent for life insurance in Audubon can help you.