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Like any other financial product, life insurance is a deeply personal decision, and the exact amount you’ll need will depend on your individual circumstances. If you have savings, investments or an inheritance to fall back on, you may want to curtail your coverage to take these things into consideration. Think of this calculator as a guide to help you find the right coverage for your unique situation.
Generally, life insurance experts suggest a number between 5 and 10 times your annual salary to make sure you can cover all of your obligations should you pass away.
Generally, your life insurance policy should cover the gap between fulfilling your long-term financial obligations — including things like a mortgage, student loans, credit card debt and your family’s ongoing living expenses. Because this calculator doesn’t account for your savings, investments and other assets, you may want to subtract your assets from the recommended coverage amount to get a more accurate estimate of your life insurance needs.
How much life insurance do you actually need?
Monthly expenses | monthly Cost |
---|---|
Term life insurance | $15 – $30 |
Dining out | $200 |
Health insurance | $300 |
Cell phone bill | $100 |
Car insurance | $120 |
Car payment | $250 |
Alcohol | $50 |
Gas | $80 |
Internet | $80 |
Student loans | $300 |
Credit card bill | $100 |
Average life insurance coverage amounts range from $50,000 for a bare-bones policy all the way up to $5 million and beyond. For the majority of policies, providers offer coverage in multiples of $50,000 up to $1 million. When you’re young and healthy, the difference between adding an extra $50,000 or $100,000 in coverage to your policy can be low.
Use our calculator to learn a recommended coverage amount, and then factor in your assets and any other expenses unique to you and your family’s circumstances. After you’ve found a number you’re comfortable with, round up to the nearest $50,000 to get a typical coverage amount.
Now that you know how much coverage you’re looking for, compare life insurance providers to find a policy that ensures your family’s taken care of — no matter what happens in the future.
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