How much Life Insurance should an individual own?
There is no “one size fits all” approach to how much life insurance an individual needs, as there are many factors that should be considered, including but not limited to:
- Income sources (and amounts) other than salary/earnings
- Whether or not the individual is married and, if so, what is the spouse's earning capacity
- The number of individuals who are financially dependent on the insured
- The amount of death benefits payable from Social Security and from an employer sponsored life insurance plans
- Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need, special needs circumstances), etc.
It is recommended that a professional insurance agent provide a “needs analysis” for a precise calculation of how much life insurance is appropriate.