If you die early, exactly how much money will your loved ones need? How much will it take to pay off debt? How much to replace your income? Is providing funds to cover college costs for your children important, and if so, how much money will that take? How do you account for inflation?

Financial experts typically recommend you have at least enough Life Insurance and liquid assets to equal five times your annual income, ignoring inflation, and seven to eight times your income, factoring in inflation. If you have children, be safe and err on the side of too much. I recommend that you use a multiple of 7.5, factoring in inflation. Why? Because Life Insurance is cheap—especially for young families, when the need for Life Insurance is greatest.

> Visit the Insurance for Dummies website.

From Insurance for Dummies © 2001 by Wiley Publishing, Inc. © 2000 Text and Author Created Materials Copyright Jack Hungelmann. Used by arrangement with John Wiley & Sons, Inc.

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