Some states require this guide to be included with the application for life insurance. It has so much valuable information in it for consumers that I will be selecting excerpts from it for this and future postings. Today, I will include the section “How Much do you Need?”
Here are some questions to ask yourself:
1. How much of the family income do I provide? If I were to die early, how would my survivors, especially my children, get by? Does anyone else depend on me financially, such as a parent, grandparent, brother or sister?
2. Do I have children for whom I’d like to set aside money to finish their education in the event of my death?
3. How will my family pay final expenses and repay debts after my death?
4. Do I have family members or organizations to whom I would like to leave money?
5. Will there be estate taxes to pay after my death?
6. How will inflation affect future needs?
As you figure out what you have to meet these needs, count the life insurance you have now, including any group insurance where you work or veteran’s insurance. Don’t forget Social Security and pension plan survivor’s benefits. Add other assets you have: savings, investments, real estate and personal property. Which assets would your family sell or cash in to pay expenses after your death?