Be Cautious Who You Get Advice From About How Much Life Insurance You Need

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I've seen a few things recently that bother me and I thought that it was important that I share my concerns with you before another person makes a big financial blunder that could potentially hurt them and their loved ones later in life.

Awhile back I saw a page on the internet that, unfortunately, I can't share because of liabilities that said that you only need to have life insurance that amounts to three times your annual take home. This disturbs me and no, not because I think that people should buy more than that as a rule of thumb but because every family and individual are unique and have different personal needs, family needs and obligations. It's highly unlikely that a qualified life insurance agent would intentionally lead you to believe this to be true. Why? Read this.

Here's an example of why this wouldn't work for most people.everyone. Let's say that we have a family of four where the children are young, ages 7 & 5, respectfully. The mother is a housewife and has no real job skills other than working at McDonald's as a teenager, which was a few years back. The husband earns the majority of the money and makes a decent income of around 60k per year and, like many of us has bills to match that income.

They live in a nice three bedroom house that they're buying, have two car payments Health Insurance which, even though it's included as a job benefit for himself (after deductibles), he still must is required to} pay to have the family covered. They also must pay car insurance for two cars, life insurance for four people, in multiple amounts, homeowners insurance, dental coverage and of course all of the other regular expenditures such as food, clothing, utilities, ect. Also, they must send money at the end of the month to pay for her mother who is in a nursing home.

There are many variables that could be thrown into this and I could easily add more and more monthly expenses, but do you see how those bills added up for this family?

This could be similar to your own situation,living situation, give or take. In case of this man's untimely death do you believe that three years worth of his annual income would be enough life insurance for this family? Let's do some figures.

With the man of the house bringing home an annual income of $60k that times three years would give this family one hundred eighty thousand dollars worth of life insurance. This could probably be stretched into 4 years worth of living expenses considering that the breadwinner is now gone, but that only brings the kids to the ages of 9 & 11, what then?

It's feasible that the man could have allowed for this occurence, even beyond a normal life insurance policy, by also buying a "Mortgage Life" policy that would pay off the house in the event of his death. He may have also made provisions in the automobile contracts. But what if he forgot? Even though he had done this it still might have stretched the families living expenses another 3 or 4 years, depending on how much they cut out unnecessary things. That would bring the youngsters to the ages of 13 and 15 years old now. What's going to happen the next five years until the youngest child turns 18? What about college for the two of them? Do the couple's parents have burial insurance? They may not if this couple is already sending money each month for the mother's care.

This is all simply a unique example of a common American family, but I wanted you to just take a moment and really think about these things. The only way that you can determine how much life insurance will be enough for you and your family is to actually sit down and look at every bill that you pay now the bills that you know you'll be paying in the future, all of the variables that could possibly happen (if these didn't happen there might not be a need for insurance) and then when you think you've got a good number add another 20%, just in case. It's always better to have more than you need than not enough.

If you are the primary provider of your family wouldn't you want to know for for sure that your family was going to be taken care of in the event that something happened to you, no matter what occurs? Me too. The only point that I'm trying to get across is to not let someone else pitch to you how much life insurance you need. Sit down with your other half and then contact a qualified agent. Do it right the first time because, unfortunately, there is no second chance in these life and death circumstances.

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