When it comes to determining how much life insurance is needed, there’s no one answer fits all. Each insured has to look at their own individual needs and assess how much life insurance is needed to cover the living expenses of their spouse and children after they have passed away.

There are different considerations to evaluate. For instance, you can consider the ages of your family members to determine how long you may need to take care of your family. If you have younger children, you may want to consider taking care of them for a longer period of time – let’s say until the age of 21 years or until they complete college and can then take care of themselves. You may also want to consider how far your spouse is from retirement age when he/she will begin receiving social security benefits and you may want to supplement that. Or, if you have older children you may not need to take care of them for a long period or not at all if they are already doing well in life. If that’s the case, you may only want to look at leaving enough behind to cover your final expenses.

What will you leave behind?

You can start by taking a self-inventory of your monthly expenses, such as rent or mortgage, food, utilities, car payments, and other bills. Once you’ve tallied your monthly expenses, multiply that by 12 months to get your annual expenses. Let’s say you came up with $50,000 in annual expenses. Then, multiply your annual expenses by the number of years you want to make sure your family is taken care of. Let’s say you want to take care of your family for 20 years after you’re gone. Let’s multiply the annual $50,000 x 20 years to get to $1,000,000 in coverage.

Another way you could look at it is to consider how much your annual salary is and multiply it by the number of years you want to sustain your family. For example, let’s say your annual salary s $75,000. You can multiply your salary by 10 years and come to $750,000 as the the amount of coverage you need, and so forth.

The higher the cash value, the higher the premium

To some $1,000,000 may seem like a lot of money but when you consider the costs of your monthly and annual expenditures over a period of years, you realize it’s really not that much. But when you look at the picture, the amount of premium you will need to pay is affected by several things – cash value,But keep in mind, there are factors that affect your your age, and the length of the term. How much do you consider a worthwhile amount to pay monthly now to cover your family should something fatal happen to you?

Once everything is considered and you’ve settled on an amount suitable to your needs, it’s time to find a agent who can match you to the desired coverage to meet your needs. The sooner you decide to purchase the lower your premium amount since premiums are tied to age at the time of application.

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Glenda Warren is Owner/Agent at The Legacy Group, Inc., a life and health insurance powerhouse located in Memphis, TN. Visit online at www.thelegacygrpinc.com