How Much Life Insurance Should I Buy?
How Much Life Insurance Should I Buy?
At a minimum, for an employed individual, use 10x earnings - so if you make $100,000 per year, the minimum amount of insurance you should have is $1Million. Don’t include or deduct your group life insurance (that which is provided by your employer) in your total when going out and purchasing an insurance policy. For the upper bounds of how much to get, look at how many years of working income you have ahead of you times your income - so if you will work 20 more years and you make $100,000 per year, the upper bound is $2Million, although keep in mind that your annual income will likely go up over the next 20 years. For someone who doesn’t work, use the working spouses’ earnings calculation. The coverage should be proportionate to the loss.
