How Much Life Insurance is Enough?

Posted on November 21, 2007 at 12:03 pm
Filed Under Financial Planning

One of the most popular statements we hear from clients is “I don’t want to be over insured”.

For years, many Advisor’s have used a variety of tools to help their clients determine just how much life insurance is actually enough. At the end of the day, the decision is entirely yours but it is definitely worth your time to explore these numbers and use a variety of different formulas and scenarios to determine if you do in fact have enough coverage. I can’t help but think that at the time the life insurance is needed, a recently widowed spouse wouldn’t want as much as possible.

Your Take-Away: There are multiple tools you can find online that will assist you in looking at these scenarios. If you check out yahoo.com, msn.com, google.com and of course our own site, you can play around with the life insurance calculators available and determone how much is enough. There are many needs that most people don’t naturally think of such as day care to enable the survivor to continue to work and earn an income, education and even lifestyle changes. After all, would you want your spouse to be able to pop over to Dairy Queen for an ice cream cone with your kids, just because?

Much like the retirement number we’ve talked about a number of times, there is no perfect number or solution. This is a very personal decision, but you owe it to yourself and your family to at least do the home work.

Until next time, have a Wonderful Wednesday!

Chris

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