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How much life insurance do I need?

How much life insurance do I need?

            In most cases, if you have no dependents and have enough money to pay your final expenses, you don’t need any life insurance.  If you want to create an inheritance or make a charitable contribution, buy enough life insurance to achieve those goals.  If you have dependents, buy enough life insurance so that, when combined with other sources of income, it will replace the income you now generate for them, plus enough to offset any additional expenses they will incur to replace services you provide (for a simple example, if you do your own taxes, the survivors might have to hire a professional tax preparer). Also, your family might need extra money to make some changes after you die. For example, they may want to relocate, or your spouse may need to go back to school to be in a better position to help support the family.

Read more: How much life insurance do I need?

Why should I buy life insurance?

Family Life InsuranceWhy should I buy life insurance?

 Many financial experts consider life insurance to be the cornerstone of sound financial planning. It can be an important tool in the following situations:

Replace income for dependents

If people depend on your income, life insurance can replace that income for them if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, siblings or adult children who continue to rely on you financially. Insurance to replace your income can be especially useful if the government- or employer-sponsored benefits of your surviving spouse or domestic partner will be reduced after your death.

Read more: Why should I buy life insurance?