Are there any specific amounts of life insurance that I should buy?
Some people would say that you should purchase at least 10 to 30 times the amount of your annual income or some other formula using a multiple of your annual income. Actually, the wisest way to decide on the amount of life insurance you need is to take into consideration what the financial needs of your survivors will be. In the event of your death, you do not want your family to have to worry about your final expenses or how they will keep a roof over their heads.
The best way to determine this figure is to sit down and itemize your monthly expenses. Make sure you take into consideration funeral cost and the amount that your spouse will need to keep the house; pay the bills and take care of education expenses.
If you have problems coming up with a good solid list, it may be in your best interest to seek the advice of a financial planner. Try to find one that does not sell any products, all you need is their advice. You may also find that the use of a financial calculator like the ones located on insurance websites to be helpful.
At the end of this you should be able to have a good idea of how much life insurance you will need to provide for your family in the event that you will not be here to do it. It is a good idea to re-evaluate your life insurance as life circumstances change to ensure that the amount of your insurance continues to meet your family’s needs.