How much insurance do you need? I get that question a lot from clients shopping for life insurance.
Some people suggest 10 times your annual income. Others suggest 20 times your annual income.
My advice: Don’t get bogged down with an exact number. And don’t spend months and months thinking about it. Be safe. It’s better to have something rather than nothing. A good place to start is 10 times your annual income.
If that’s more than your budget allows, maybe look at 6 or 8 times your income. Heck, even 2 times your income is going to give your loved ones some breathing time and allow them to adjust to the new normal.
A couple things to keep in mind. Don’t spend so much on life insurance that you don’t have enough money to live on comfortably. But keep your goal in mind – providing enough financial security so your surviving spouse will have enough money to make it through the loss of the income you provide for your family.
Recent studies show that life consumers over estimate the cost of life insurance by as much as 6 times! It’s not nearly as expensive as you might believe. Below is a range of life insurance costs for a $500,000 benefit on a 20 year, level term policy. The better your health and risk factors, the lower the cost would be.
35 year old male: $21.16 – 63.88
35 year old female:$18.36-$53.81
40 year old male: $29.09-$85.56
40 year old female: $24.82-$73.06
45 year old male: $47.69-$134.36
45 year old female: $37.46-$112.88
50 year old male: $71.90-$201.71
50 year old female: $54.82-$162.75
Still not sure what to do? Then let’s talk. You reach me at 303-452-6662 or fill out the form below and we’ll be in touch soon!