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Be Cautious What You Hear About How Much Life Insurance You Need To Buy

I've seen a few things recently that concern me and I thought that it was important that I share my thoughts with you before anyone makes a big financial error that could possibly hurt them and their family in the future.

Awhile back I found a page online that, unfortunately, I can't share because of liabilities that stated that you only need to have life insurance that equals to three times your annual income. This bothers me and no, not because I tell people that folks should have more than that as a rule of thumb but because person and family are unique and have unique personal and family needs and obligations. It's highly unlikely that a qualified life insurance agent would intentionally lead you to believe this to be true. Why? Read more.

Here's a brief example of why this couldn't work most families Imagine that we have a family of four where the children are young, ages 5 and 7, respectfully. The mother is a housewife and has no real job skills other than working at McDonald's as a teenager, which was a long time ago. The husband earns the majority of the money and makes a decent income of around $60,000.00 each year and, like most American families, has bills to match that annual income.

They live in a nice family home that they're buying, have two vehicle payments, Health Insurance which, even though it's an extra as a employee benefit for himself (after deductibles), he still has to pay to insure the family. They also must pay auto insurance for two cars, life insurance for four people, in multiple amounts, homeowners insurance, dental coverage and of course all of the other frequent expenses such as food, clothing, utilities, ect. Also, they have to send money at the end of the month to pay for his mother who is in a elderly home.

There are many variables that could be thrown into this and I could also easily add more and more monthly obligations, but do you see how the bills stacked up for this family?

This might be similar to your own circumstances, give or take. In the event that this man's unexpected passing do you really think that three years worth of his annual income would be enough life insurance for this family? Let's do some figures.

With the man of the house earning an annual salary of $60k that times three years would give this family one hundred eighty thousand dollars benefits of life insurance. This could probably be stretched into four more years worth of living expenses considering that the breadwinner is now gone, but that only brings the kids to the ages of nine and eleven, what do they do now?

It's likely that the man might have allowed for this event, even beyond regular life insurance, by also taking out a "Mortgage Life" policy that would pay off the house in the event of his death. He may have also made allowances in the vehicle contracts. But what if he couldn't? Even if he had done this it still could have stretched the families living expenses another 3 or 4 years, depending on how much they cut back on unnecessary things. That would bring the youngsters to the ages of 13 years old and 15 years old now. What about the next five years until the younger child turns 18? What about college for the two of them? Do the couple's parents have burial arrangements? They might not if this couple is already sending money each month for the mother's care.

This is all simply an example of a common family but I wanted you to just take a moment and really think about these things. The only way that you can determine how much life insurance will be enough for you and your loved ones is to actually sit down and look at every bill that you currently have, the bills that you know you'll have in the future, all of the variables that could happen (if these didn't happen there might not be a need for insurance) and then when you think you've got a good number add another 20%, just in case. It's always better to have more than enough than not enough.

If you are the primary support of your family wouldn't you want to know for 100% certain that your family was going to be okay in the event that something happened to you, no matter what occurs? I would too. The only point that I'm trying to get across is to not let someone else tell you how much life insurance you need. Sit down with your other half and then contact a qualified agent. Do it right the first time because, unfortunately, there are no second chances in these life and death circumstances.

Joe Stewart is a former Life And Health Insurance Agent. He's made learning about life insurance easy for you. Go now and read simple explanations about life insurance at his website TheLifeInsuranceGuys.com or by clicking on term life insurance quotes instant quote online

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