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Do I Need Life Insurance, and if So, How Much?

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Most people start to think about life insurance after they’ve married and had children. That’s because the main goal of buying life insurance is usually to replace income if the buyer’s earning power is taken away by death. The industry standard on how much life insurance you need is five to ten times your annual salary. But it really depends on several factors such as your age, the ages of your spouse and dependents, your income, and your debts. Premium rates go up as you age, so it’s more cost effective to buy life insurance when you’re young, and also allows you to purchase more coverage.  

You can use the ages of your dependents and spouse to judge the amount of income replacement they’ll need if you die. This will vary per individual as some dependents may need support temporarily, but others could have special needs that require support for life. 

If you’re just starting out, there will be many years of income to replace versus someone who’s near retirement or has no debts. A 50 percent income replacement is a starting point suggested by some experts. Your mortgage, car loans and any other debts should be included in your insurance planning. Also factor in future education for your children. 

Life insurance is an important investment that can help substitute your income and maintain your family’s current standard of living upon your death. If you’d like to learn more about the right life insurance policy for your family’s needs, give us a call or stop by our website today.  

Mike Unterreiner

Financial Legacy Associates

(636) 777-4200

Financial Advisor in Missouri


Check the background of this firm/advisor on FINRA’s BrokerCheck.