Here are some things to think about:
- Life insurance helps allow your dependents to move forward in life financially.
- Workplace-issued life insurance policies may not provide enough coverage for you and your loved ones.
- Many families underestimate how much they need.
Question I know I need more life insurance than what I have through work. But how much?
As a Farmers Insurance® agent, Sam Schlehuber helps customers in Dallas, Texas, understand their insurance options. Here’s what he says about selecting the amount of life insurance coverage you want.
Answer I take the income approach when discussing life insurance with customers. A good starting point could be seven to 10 times your annual income. How much do you make each year? Let’s say $75,000. Even if your income never increases, that’s still $1.5 million over the next 20 years. How much of that do you want to replace for your family? At the end of the day, life insurance is about helping you financially support your dependents after you’re gone.
In my career, just a handful of people have come to me with what they determined to be enough coverage already in place. A lot of folks have life insurance through their employer, but workplace policies may not be adequate. They may go away if you change jobs.
It’s easy to underestimate how much you’re worth because we generally think of income on an annual basis, not over the course of decades. And most of us don’t have a good grasp on the total cost of major expenditures like college. That’s why it’s important to sit down with an agent and discuss how much coverage you might need so you can select the amount you want.
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