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How much life insurance do I need?
How much life insurance you need will depend on many factors: your long-term financial obligations, those who are dependent on your income, the cost of final expenses, and more. Many people find that 10-15 times their income is enough coverage, but this simple approach might not always provide the support you’re looking for.
Our life insurance calculator is a good place to start when trying to determine how much coverage might be right for you and your family, but weighing all your options and sifting through the fine print can become time-consuming and overwhelming. We can help simplify the process, providing coverage and cost comparisons from some of the nation’s most trusted insurance companies in just minutes. We’ll take the time to get to know your needs and find the best life insurance policy options available to you.
Life Insurance Explained
Life insurance is an easy and affordable way to make sure your loved ones have a financial safety net if you were to pass away unexpectedly. There are many different types of life insurance coverage available, so shopping for a policy can quickly get overwhelming. At SelectQuote, we’ll make it easy, working with you along the way to help you figure out the best option.
For example, you may consider term life insurance—which is typically the most popular and affordable option—or permanent life insurance, which offers lifelong coverage with a cash value component that can be used as a savings element. If neither of these traditional life insurance options meets your needs, you can explore no medical exam life insurance, through which people age 60 or under and in good health can qualify for up to $5 million in coverage in less than an hour, bypassing the medical exam entirely. Let’s walk through the factors that will help you determine the right amount of coverage to purchase so you can decide what policy type makes sense for your situation.
What You Need to Cover Through Life Insurance
The “right amount” of life insurance coverage can be determined by considering everything you currently pay for and what you would need to pay for in the future. This can seem like an overwhelming question, so we’ve broken it down into a few basic categories for you.
Expenses, Debt, and Liabilities
Start by considering your existing expenses, any potential future expenses (such as the cost of raising a child), and current debt and liabilities. You want to make sure your beneficiaries and dependents who currently rely on your income for some of these costs are able to maintain any outstanding payments without worrying about potential financial burdens.
Dependents and Their Educational Expenses
Think about the cost of raising a child or paying to support an aging parent—these are realistic expenses that many people face. When considering the amount it costs to raise a child, think not only about everyday expenses but also about the potential cost of college.
Future Savings and Final Expenses
When you’re looking for a life insurance policy, it’s important to consider how much support you’re currently providing for your family. From groceries and medical expenses to family vacations and utilities, it’s important to have a realistic view of how financially dependent your loved ones are. Additionally, it’s important to consider the cost of final expenses. The average funeral cost can fall between $6,000 and $8,000, which can be an additional burden to a family without life insurance coverage.
What You Should Also Keep in Mind with Life Insurance
While it’s important to consider various financial obligations when purchasing life insurance, there are other factors to keep in mind as well. Your health, age, lifestyle, and even occupation can determine how much coverage you’ll need. For example, if you’re a high earner, you should consider life insurance plans that will adequately replace your salary for those who depend on it. Let’s discuss some other factors that can impact the amount of life insurance coverage you need.
Health and Age
Both your health and age at the time of purchase can directly impact the length of your policy and cost. The younger and healthier you are, the greater your chances of a favorable rate, but you’ll likely need coverage for a longer period of time. The older you are, the more likely you’ll have to pay a higher premium for certain types of coverage, but we can help you consider all available options to find you the right coverage with the right carrier—and all at the right price.
How Much Life Insurance You Can Afford
An important part of purchasing life insurance is ensuring the cost of your monthly premium will fit into your budget. Knowing ahead of time what a realistic premium payment would look like for you will help you decide how much coverage you can afford. When you work with SelectQuote, we provide accurate, detailed quotes from a variety of carriers, helping you understand how the cost of these plans will fit into your budget so you can feel confident choosing a policy.
Still have questions? We’re here to help:
Find the Right Life Insurance for You
At SelectQuote, we have nearly 40 years of experience helping people like you find the right policy for their needs and budget. Our licensed insurance agents are invested in matching you with the right coverage amount and policy type for your situation. We take the time to learn about your unique priorities and use that information to gather unbiased quotes from a variety of trusted carriers in just minutes. Get started today to find your loved ones the protection they need.
We do the shopping. You do the saving.
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