How Much Life Insurance Do I Need 

How Much Life Insurance Do I Need

One of the most common questions people ask when they begin looking for coverage is "how much life insurance do I need?", and it is an important question. Life insurance coverage is intended to protect your loved ones financially should something happen to you, but you obviously don't know ahead of time if something will happen to you, so how are you supposed to know how long should you buy protection for? Should you buy for a set period of time like what term life insurance covers, or should you buy it for the rest of your life, like what whole life insurance covers? It is entirely possible that for your situation, there might be an even more ideal type of coverage. Here we will talk about how to get some clarity on these issues.

Understanding How Much Coverage Needs You Have

What policy type you buy will entirely depend on your personal, financial and health situation. You need to get a comprehensive accounting of all your finances, especially how much outstanding debt you have, an idea what your final expenses will cost, and a total of all other expenses you would want to cover, such as mortgages and college tuition. This will help you determine the amount you are getting on your policy. You also need to know how much you can afford to pay each month on your premium, since it doesn't make much sense to waste your time looking at coverage you can't afford in the first place. From here you can get a much better picture of what your needs are and what your ballpark budget is as well.

How Many Expenses Will You Have in the Future?

  • Outstanding debt
  • Mortgages
  • Final expenses / burial expenses
  • Replacing your income for dependents

Comparing Two Popular Types of Policies

Two of the most common policy types are whole life and term life. What is the difference between whole and term life insurance? Term life covers you for a set period of time, most commonly 10, 20, 25 or even 30 years. This type of coverage is ideal if you just want to cover expenses up until a certain point of time. For example, if you just had a new child and want to make sure they have some security, it is very common to get a 20 year term policy. This way your new child will have a financial security net until they themselves have reached adulthood. Whole life coverage on the other hand, covers you until the day you die. One of the biggest determining factors for most shoppers between these two policies is the price tag. Term life is in general considerably cheaper every month than whole. Whole life comes with other advantages over term, such as acquiring a cash value over time that you can sometimes withdraw or borrow against. It will all depend on your situation which is better.

Term and Whole Comparison Side by Side

Term Whole
More affordable X
Flexible policy lengths X
Generates cash value X

Getting Help Shopping for Life Insurance

One of the best moves you can make to ensure you get the right coverage and the best deal is to get some professional assistance. No one is an expert at everything, so it makes sense to get the best help available when making such an important financial decision to protect your family. You can do this by talking to a life insurance broker instead of trying to do everything on your own. Having a broker on your side is a great way to accurately assess how much life insurance coverage you need and what type of policy fits you best. Not only are these brokers professional agents, but they are also not tied down to a specific insurance company, which means their loyalty truly lies with you. If a broker presents you with different options for coverage, you can be much more confident that you are getting the ideal coverage at the best price possible. You can get started right here by filling out our quick form and we can connect you to the best broker possible for your case and you can get the reliable help that you need.

Disclaimer: is not a licensed insurance agency or broker. The content of this website is for informational and comparative purposes only and is not intended to take the place of professional advice from a licensed insurance agent. recommends that all consumers consult with a licensed insurance agent before purchasing any insurance policy.

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