The face value on life insurance policies vary from person to person.There are essentially 2 factors that come into play when obtaining life insurance. The first is the amount of money it would it take for a family to maintain the standard of living to which they currently have and how much a family can afford to pay for insurance premiums each month.

A life insurance policy should depend on the amount of money a family will need to maintain the same standard of living. This means that there is a certain monthly or yearly income needed to pay for minor and major expenses such a mortgage, cars and education. Life insurance needs alter with each situation.If there are young children in the home, it is safe to assume that they will need funds to support them until they are able to pay their own way.  The approximate costs of college education must be calculated and added to their other overall expenses, such as for clothing, food, shelter and other necessities must.Additionally, outstanding debts, such as mortgage and car loans must be included in the calculation.  Finally, calculate any additional expenses needed to maintain the same standard of life.

You can confer with a financial advisor to help them construct a viable estate plan to ensure security and stability for their beneficiaries. Even during this time when the markets are unpredictable, financial advisors can help their clients put their money in the investments that will yield reasonable returns on their investments each year.  An acceptable rule of thumb is to approximate the income taxes on investment returns at 35% to predict yearly income. Divide the annual income by 12 to arrive at the average monthly income.  For example, if a family has $8,000 in expenses per month, they will need approximately $3,000,000 in coverage.

This is likely a conservative amount of life insurance as $3,000,000 earning 5% interest yearly equates to $150,000 in annual income.After taxes, the annual income would be around ,000 or ,000 per month.

One should only consider an amount of life insurance cover that requires an annual premium that is affordable.  Consumers must be prudent when purchasing a life insurance cover policy.  It is essential that they know their limits, because purchasing a policy and having it canceled because they cannot afford the payments will result in a loss of the premiums invested and their beneficiaries will receive no death benefit.

It is relatively easy for consumers to find that happy medium where they are comfortable with the cost of the premiums and the amount of coverage it provides to sustain the same standard of living for their families. Get a free quote today to compare multiple rates from the top carriers.

The first thing you need to do when you start shopping for life insurance is to figure out how much life insurance you really need. There are many ways to determine this. Here are a few:

The Rule of Thumb Method: Take 5 to 7 times your annual gross income and that would be the amount of life insurance coverage you should carry.

The Expense Calculation Method: Add up all your expected expenses should you die, including: expenses for your burial, an emergency cash fund, money to pay your current debts, mortgage, college tuition, and any replacement income needed for your family,. Now, add these all together to determine your total life insurance needs.

The Income Replacement Method: Decide how much of your current annual gross income your family would need for them to maintain their present lifestyle and standard of living. The average is 70% of your current annual income. What you want to do is purchase enough life insurance so that the proceeds, if invested at an after-tax rate of return of 8%, would generate enough income for your family.

Let’s use an example to show you how this works: If you earn $30,000, then your life insurance policy should provide $21,000 of annual income for your family. $30,000 times 70% equals $21,000 of annual income. Now, if your family invests the proceeds of your life insurance policy, they need to receive $21,000 annual income from that investment. $21,000 divided by 8% (rate of return) equals $262,500 of life insurance protection.

I would say that a combination of all three of these methods is best because everyone’s age, health status, and marital and financial situation is different. Be sure to speak with an experienced agent for more guidance on the right amount of life insurance coverage or your family. Get a free quote today to compare multiple rates from the top carriers.

One of the most important steps when shopping for life insurance is to find out how much you really need. A lot of people will come up with an arbitrary number and when I ask them how they came up with that amount, their response is usually “I don’t know.”

In order to determine how much life insurance coverage you should have, you need to consider a couplHow e things. First is your dependents, which can include children, a spouse, parents, or anyone else who depends on you for financial support and assistance. Secondly, you need to evaluate your assets and liabilities.

Many agents will recommend having 5 to 10 times your annual income, but your financial situation may require more or less than that amount. Here are some questions to ask to determine how much life insurance is enough for you.

If you are married:

• How much income would need to be replaced for your spouse to be able to continue financially?
• What kind of lifestyle do you want your family to have if something happens to you?
• How much money will your spouse need to pay for your children’s education expenses?
• How much money will your spouse need to take care of final expenses such as funeral costs, estate taxes, probate fees, etc.?

If you are divorced:

• Does your divorce agreement require you to have life insurance for your ex-spouse?
• How much financial responsibility do you have for your children’s education costs?
• Are you financially responsible for the home?

If you are single:

• Do you have any outstanding loans or debts that would affect your remaining family members?
• Do you have family, friends, or a charity who you would like to leave money to

An experienced agent will go over all of these things with you to determine your family’s obligations and financial goals. I always say that it’s better to have some life insurance than to not have any, but it’s best to have a sufficient amount to make sure your family will be taken care of. Get a free quote for life insurance today to compare rates from the nation’s top carriers.