Calculating How Much Insurance You Need

Life insurance should provide some peace of mind for your beneficiaries, but it can be confusing to know how much your family will need upon your death. At NCSF Foresters, you can get specific help about your own situation, but you can think about some things before you ever speak to an agent. There are two ways to calculate how much life insurance you should get:

Income replacement – With this approach, you calculate how many years of income your family would need if you died. Generally, you should think about 15 to 20 years out, times your annual income. You might even want to think about your after-tax earnings or adjust the figures for inflation, but this is a good starting point. It’s just not individualized.

Needs-based – With this approach, you take a look at how your death will impact your dependents. It is based on where you are in life, whether you have a mortgage that needs to be paid off, how old your children are and whether your spouse can work or not. It is more complex to calculate life insurance this way, but it does give you a better picture.

At NCSF Foresters, you’ll find tools and resources to help you get the life insurance that fits into your budget and needs. Don’t overlook the value of having a good policy to protect your family.