How Much Life Insurance Do I Need?
In this chapter, we address one of the most important questions about buying life insurance: How much life insurance do I need? The answer to that query depends on several variables, four of which are debt, income, mortgage and education (D.I.M.E.). You can use our life insurance calculator below to help determine these needs. Above all, your goal should be to ensure the economic safety of your family and loved ones. The enclosed categories provide an overview for you to follow, so you will have a better sense of how much life insurance you need or how much additional coverage you should get. Also, feel free to get a quote and use our term life insurance calculator to see instant rates at any time.
D.I.M.E
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Events That May Require You to Buy More Life Insurance.
Marriage.
You need a sufficient amount of life insurance, particularly if you are the sole source of income for you and your spouse. Also, in the event your spouse is liable for your debts (depending on the state where you reside), you do not want to have your widow or widower in such a deep financial hole. Try our free term life insurance calculator to see rates, and consult with Local Life Agents, so the necessary coverage is in place to safeguard your spouse.
Mortgage Debt.
To expand further on this topic, mortgage debt is, according to statistics compiled by the Board of Governors of the Federal Reserve System, the single greatest source of household debt in the United States. The average outstanding mortgage is, as of this writing (in June 2015) $156,333. Without enough life insurance to pay off your mortgage, never mind other debts such as credit cards (the U.S. average is $15,706) or student loans (the U.S. average is $32,953), your family could be in a financially disastrous situation. They could lose their home, all because you do not have enough life insurance to protect them from this danger.
Children.
According to the latest annual report compiled by the U.S. Department of Agriculture, it will cost a middle-income family $245,000 to raise a newborn child to the age of 18. This expense does not include the price of college tuition, and room and board. If you have a child, or if you have children, you need to ensure that your coverage will honor these costs and guarantee the payment of other necessities. Use our life insurance premium calculator at any time to determine how much life insurance will cost to protect your children’s future.
Starting a Business.
If you are a business owner or have partners, or if your family depends on your business as their source of income, you may want to increase the amount of business life insurance you have. Without that coverage – say, a $500,000 policy for a 20-year term – your partners may not have enough capital to run your business, and find a qualified replacement to fill your role. Worst of all, the lack of additional coverage could result in the dissolution of the business; it could deprive your family of the income it needs to survive.
May I Get Additional Life Insurance Coverage for My Current Policy?
Adding Coverage to a Term Life Policy.
If you already have a life insurance policy, and you need or seek to buy additional coverage, you have some immediate choices at your disposal. For example: Some carriers will allow you to add coverage to your current policy. If you have a Term Life policy, you will likely have to purchase a separate and new life insurance policy. When buying a new policy, you will also have to medically qualify for additional coverage.
Adding to a Permanent Policy.
If you have a Permanent life policy, you may be able to buy additional coverage without having to purchase a new policy. You will, however, have to go through the underwriting process again. The rules will be the same, as if you were to apply for a new life insurance policy.
The U.S. is in the midst of an unprecedented life insurance crisis. With $15 trillion in unmet life insurance needs, couples and families – and the nation as a whole – face potential economic ruin.”
