How Much Life Insurance Coverage Do You Need?

When purchasing life insurance coverage, people will oftentimes make an “educated guess” regarding the amount of benefit that they need. In many cases, this estimate is based upon how much coverage is being offered in a group benefits plan, or on how much premium they can easily afford.

Yet, while some amount of life insurance is better than having none at all, it is important to have a good understanding of how much coverage you truly need – as it could make a drastic difference in how your loved ones will go on if the unthinkable should happen.

If you were to purchase too small of a life insurance policy, your loved ones could be left with additional expenses and no protection to cover those bills. This could make an emotional situation a thousand times worse. We know that finding the perfect life insurance policy can be a frustrating process, but it doesn’t have to be. We are here to make it as quick as simple as possible.

Perhaps you are in search of low premium life insurance. Let us guide you in your search.

Determining Your Need for Life Insurance Coverage

There are a number of ways to determine an approximate amount of life insurance that will be appropriate for your needs. First, the need for life insurance can vary a great deal depending upon the current age and financial responsibilities of the insured.

It can also be dependent on what other assets and income – if any – will be available to the insured’s dependents should he or she pass away. For instance, a young family would likely need life insurance to protect the care needs of the children should one or both of the parents pass away. On the opposite spectrum, older children may wish to seek like insurance protection on their parents, as their insurable interest will be that they will need the life insurance coverage to help with any medical and final expenses when the parent passes away.

In addition, the death of a young primary income earner can create a number of financial hardships for his or her survivors – especially if the insured’s spouse or partner has small children and would find it difficult to enter the workforce while also raising the children.

In cases such as this, the proceeds from a life insurance policy can help in providing an income for the survivor so that they can delay – or avoid altogether – having to go back to work while their children are still infants.

Who Should Consider Having Life Insurance Coverage?

When determining who needs life insurance coverage, it is essential not to automatically rule anyone out. For example, it is oftentimes assumed that only those who earn an income need life insurance. However, this is not the case.

Non-income earning care providers of children also play an important economic role in a family. Although the financial value of care giving is often overlooked, the truth is that should the mother of a small child suddenly pass away, her role would quickly need to be replaced. In this case, considering her numerous roles of cooking, cleaning, and caring for children, the cost to replace all of her duties would likely be quite high.

While just about everyone needs life insurance, there are some demographics that can consider not having life insurance coverage. If you’ve reached the retirement stage of your life, you may have enough money saved up to skip the insurance plan. If you don’t have anyone that relies on your income and you don’t have any massive debts like a mortgage payment, then you can save money by skipping a life insurance plan.

How Much Life Insurance Do You Need?

Before moving forward with the purchase of a life insurance policy, it is essential to assess your survivor’s overall financial needs. These needs should include the income replacement that would be required in order for survivors to maintain their current lifestyle.

Coming up with an accurate figure here will entail adding up monthly debt responsibilities such as rent or mortgage, auto loans, credit card payments, and other personal financial responsibilities.

In addition, the estimated final expense costs of the decedent should also be included to determine how much final expense life insurance you will need. These typically encompass the cost of a funeral and headstone, as well as any potential medical bills that would not be covered by the decedent’s health insurance.

Added to one’s current income replacement, the longer term needs of survivors should also be considered. For example, future college education funds, as well as the cost to raise children to adulthood, and long-term housing and utility costs also need to be determined.

Getting the right amount of life insurance coverage is a delicate balance between ensuring that you have enough life insurance protection and not paying for more coverage than you need. As you can see, there are several different factors that are going to go into calculating what your life insurance needs are. Our agents can help ensure that you’re getting enough coverage for your loved ones.

Keeping Your Life Insurance Coverage Updated

Once you have purchased a life insurance policy, it is important to review your policy regularly as coverage needs can oftentimes change. For instance, major life changing events such as marriage, divorce, the birth or adoption of a child, or the purchase of a new home or business will all constitute a likely change in the amount of life insurance proceeds that your survivors will need.

Even without major changes in your home or family situation, it is recommended that you review your life insurance coverage at least once per year. This is especially the case with term life coverage, as these types of policies have an eventual expiration date upon which coverage will need to be re-qualified for.

Type of Life Insurance Plans

Aside from getting the right amount of life insurance coverage, it’s important that you get the right kind of coverage. There are dozens of different kinds of policies that you can choose from. Each of them has different advantages and disadvantages that you’ll need to consider when you’re purchasing coverage.

The most affordable option is a term life insurance plan, which we just mentioned in the previous sections. These plans are bought with a pre-determined expiration date, and once that date has passed, you’ll no longer have life insurance and you’ll have to reapply for coverage. These plans are a great option because you can purchase them to meet the needs of your debts and other needs. If you’re looking for the most affordable option, term plans are going to be the best option.

Another option is to purchase a whole life plan, which is a form of permanent life insurance coverage. As you can guess from the name, these plans are effective for your whole life. As long as you continue to pay the monthly premiums for the policy, you’re going to have life insurance coverage. These plans are an excellent option for anyone that doesn’t want to have to reapply for life insurance or want to lose coverage in the future.

Whole life plans have a unique benefit, which is that they build cash value inside of the policy. The longer that you pay the premiums for this policy, the more value that’s built up inside of the plan. You can use this cash value to invest or pay the monthly premiums for the coverage.

Life insurance can be a complex topic. There are many types of policies on the market today – each with their own set of unique characteristics. Having a good understanding of why life insurance is needed – and how it fits into your overall financial plan – can make the subject easier.

If you have any questions about getting life insurance coverage for your family, or any questions about how much life insurance your family needs, please contact one of our agents today. We would be happy to answer those questions and ensure that you’re getting the best insurance policy to meet your needs.

You never know what’s going to happen tomorrow, which means that you shouldn’t wait any longer to get the life insurance coverage that your family deserves. If something tragic were to happen to you, your loved ones would be left with a massive amount of debt. That can make an already difficult situation a thousand times worse. You should start the life insurance process today to give your family protection.

Our agents have years of experience working with applicants to ensure that they are getting the best plan possible. Unlike a traditional insurance agent, our independent agents don’t work with one single company. Instead, we work with dozens of highly rated life insurance companies across the nation.

Our independent agents can bring all of the best insurance rates directly to you. Each insurance company is different, which means that you could get drastically varying rates depending on which company that you choose. If you have health conditions or are in poor health and want to know how to get life insurance with pre-existing conditions or no exam life insurance, the best idea is to compare rates from dozens of companies before choosing the one that works for you. Maybe you’re concerned because of your age and you’re searching for senior term life insurance or even affordable high risk life insurance; we can help.

Your time is valuable, don’t waste it calling dozens of companies. We can bring all of the lowest insurance rates directly to you. No hassle. Our agents can save you both time and money on your life insurance plan.

About Jack D. Davis at
About Jack D. Davis at

Jack D DavisBorn and raised in a quiet suburb of Philadelphia, PA, the youngest of nine children, son of two wonderful parents, Jack developed his work ethic early on. While attending West Chester University, he volunteered to join the US Army Reserves for a six-year enlistment. Attending college during the day, working evenings, and fulfilling his military obligation on various weekends, Jack learned the value of hard work and time management. After graduating from college (BS in Business Management), he began working as a sales representative for a Fortune 100 company and honed his marketing skills. In 1985 Jack started his financial planning career as an agent with Mutual Benefit Life.  After Mutual Benefit Life ran into financial difficulties, Jack decided to “go it alone”. His company, “Eagles Soar Enterprises, LLC.” successfully grew for almost 30 years. Jack’s skill-set is understanding and recognizing the personal needs of families and business owners. His patience in explaining the numerous options available is greatly appreciated by his clients. Jack agrees that life insurance is a difficult topic and people are rarely “excited” about discussing the subject. When Jack was 23 he witnessed firsthand how important life insurance is when he lost his Dad to cancer. Jack’s Mom used the life insurance proceeds to help minimize the financial loss.  Jack recognizes how critically important proper insurance planning is to the surviving spouse, business partner and, most importantly, the children of his clients. In his free time Jack enjoys playing tennis, horseshoes, ping pong, exercising, reading and attending Philadelphia Eagles football games. Jack has two wonderful children and currently resides in beautiful St. Petersburg, FL. Questions? Call Jack at 1.800.277.3098 or email:

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