Do You Have Enough Life Insurance?

Unless your kids are out of the house, then no.  Probably not. 

PLEASE NOTE: I do not sell life insurance.  I dropped my insurance license when I left Wells Fargo. I do not make a single, red cent from clients who buy life insurance.   

So what I'm about to tell you is conflict-free and completely objective. 

Life insurance replaces your income if you're gone.  It's that simple.  If you kick the bucket today, your spouse and kids will miss you.  But they'll really miss your income.

So how much life insurance do you need?  Let's use an example to find out.

Assume your living expenses are $10,000 per month, not including your mortgage payment which has a balance of $1,000,000.    You and your spouse both work and contribute equally to your monthly expenses.   And you want to pay for your two kids’ college educations, which will be about $250,000 each in 15 years.

If that describes you, then you would need a $2,000,000 life insurance policy today.   

  1. $2,000,000 is enough to:
  2. pay off the mortgage,
  3. send the kids to college and
  4. make up for the lost $5,000 of monthly living expenses.  

Now ask yourself  - Do I have enough life insurance?  Even if you’re paying for the "3x your salary" option at work, I bet you're still underinsured.

Clearly, I've drastically over-simplified things to make the point easy to understand.  

How much life insurance you need is very specific to you and your family.  Things to consider include - but aren't limited to: 

  • income
  • spending rate
  • savings rate
  • current savings
  • college goals
  • home ownership
  • risk tolerance
  • other financial goals…
  • and on and on and on 

As part of the financial planning process, a good Certified Financial Planner will complete a Life Insurance Needs Analysis to determine how much life insurance you actually need. 

Now if only you knew a good Certified Financial Planner… hmmm.   Oh wait… I've got a guy!

Check him out here - www.financialzen.com and schedule a free consultation here – www.calendly.com/financialzen