How Much Life Insurance Do I Need?

We all need life insurance to take care of our dependants should something happen to us and we can no longer provide for them. Should it be death or disability we all have the responsibility to ensure that those we love are taken care of. There are a few factors that determine how much life insurance we require in order to do this.

We need to assess our current life style and accordingly choose how much life insurance we require to keep those we loved living the life style that they are accustomed to. Things to consider when deciding how much income you need to generate, when taking out life cover, are everyday expenses such as food and clothing. You also need to make sure that you loved ones will be able to cover the cost of your debt whether it be a home or a vehicle or any other debt which you may have. Another very important factor to consider is education for your children, you need to have some idea of what education will cost and how much you need to be able to afford through you life insurance policy. All of these factors can give you an idea of how much life cover to take out.

Another factor to consider when deciding on the amount of life cover you need is the cost of that cover. You need to decide what you can afford in terms of your current income. A balance needs to be made between how much you need to maintain your current lifestyle and how much you can afford. This will also become a factor in determining the amount of life cover you choose.

You also need to consider the fact that you may become disabled and no longer have the same income that you are used to. Again it is important to work out how much disability cover you require to cover a possible shortfall in the income you generate. The same factors as discussed above are important in determining how much cover you need.

None of us like to think of death but we also don't like to think that, should we no longer be able to provide for our loved ones, they will become destitute. It is important to be pragmatic and responsible in ensuring that we provide enough cover to keep our loved ones afloat during an already difficult time.

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