Who Needs It

What types of people need life insurance?

First, who doesn't need life insurance?

• You're single and have no dependents*.

• You don't have debts that others will have to take on.

• You have enough savings to pay for burial costs.

If you do have dependents, but you have enough savings to support them after you're gone, you still might not need it.

Who does?

• Almost everyone else, at least for a while.

How much do you need?

Some people think they should just buy the biggest policy they can afford. But to make sure you're adequately covered---and that you don't spend more than necessary---you should use the following guideline: You want a large enough death benefit to pay for any debt and foreseeable financial obligations that your current savings won't cover.

A little equation to help you calculate your need:

• Total debt

• Total financial support you want to provide*

• Estimated burial costs

• Current savings & assets

• Estimated amount of insurance to buy

Yearly estimate multiplied by number of years

These numbers will change many times over the course of your life, so make sure you periodically review your financial situation so you can buy more or less coverage as needed.

You can use our Life Insurance Coverage Calculator to estimate the amount of coverage you need right now.

The Right Way to Estimate Coverage

There are several ways to estimate how much coverage you need, but which one is the best? Here's our take...

Some people recommend that you estimate the coverage you need by calculating your total income over an average lifespan, or by multiplying your current income by some number.

It's smarter to look at your actual financial needs now and in the coming years. You'll get a more accurate estimate and be less likely to buy too much or too little insurance.

• Needs Based Approach

• Human Lifespan Approach

• Income Multiplier Approach