Deciding how much life insurance coverage to take out can be complicated because your family’s needs will change over time. You may purchase a new or more expensive home. Marriage, children and the changing needs of you and your loved ones could require additional coverage. At Phil Klein Insurance Group, our professionals are available to help members of the Birmingham, MI community select a policy that meets your needs. We’ll work to answer questions and help you with a life insurance policy that ensures financial security.
How Much Life Insurance Is Adequate?
Some people follow the simple rule of multiplying their income times 10 and stick with that figure. Regarding uncomplicated approaches, it’s not without merit. If you earn $100,000, then $1 million in coverage seems reasonable on the surface. After all, your mortgage and expenses should be in line with annual income. That figure should allow a spouse to pay off a home and provide living expenses for several years. But what about children and college tuition?
The cost of caring for a child from birth to 18 years old can exceed $300,000. College tuition currently hovers at around $30,000 per year, and that does not include living expenses. Those two expenses alone will cut the $1 million life insurance coverage nearly in half. Factor in paying off a mortgage, the high cost of health coverage and unforeseen expenses and the Times 10 rules appears strangely inadequate.
To calculate adequate life insurance coverage for the people left behind, you’ll need to account for many things that are unique to you and your loved ones. It’s also imperative to reconcile today’s costs with future increases.
At Phil Klein Insurance Group, we are committed to serving the good people of Birmingham, MI. Our professionals are available to create a life insurance policy or update an existing one that provides your family with secure coverage. You’ll sleep better knowing that a comprehensive policy is in place.