Then, figure out the additional amount needed to pay off any outstanding mortgage balance. Your first calculation should be based on the death benefit required to generate enough income to provide for your surviving spouse. $50,000 primary wage earner, n on-working spouse, $100,000 mortgage If you add up all of your family’s current debts, regular living expenses, and future financial obligations, you can see why you need to buy a term life insurance policy. Income Protection – A life insurance policy is an excellent way for couples to protect their income for surviving family members.Mortgage Protection – A term policy can be ideal for people needing to protect an outstanding mortgage balance.Children – Life insurance coverage is ordinarily essential for couples with minor children.Married – Most married couples buy life insurance to cover each other during their careers.Is a $250,000 life insurance policy right for you? Reasons for buying life insurance: Rather than use a rule of thumb, evaluate your needs to determine an appropriate amount of coverage for your family. Is 250k enough life insurance coverage for your family?Īccording to a recent CNN article, a basic rule of thumb is that the death benefit on your policy should equal seven to 10 times the amount of your annual salary. The idea behind income replacement is to buy an appropriate amount of life insurance that would provide an income similar to if you were alive when you passed away. Many folks may not understand precisely what income replacement means. Why Buy A $250,000 Life Insurance Policy?Ī general and practical approach when buying life insurance is to replace your income if you die early.
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