How much life insurance do I need?
It’s not really about how much life insurance you need. It’s how much money your family will need after you’re gone.
We’re here to help you to design and make important decisions about insurance planning to protect your loved ones.
The right level of coverage
When buying a life insurance policy, it’s important to choose the right amount of coverage. You don’t want too much, paying for protection you don’t need. Nor do you want to have too little, leaving your loved ones under-protected.
Determine how much life insurance you need
There are two common methods for calculating the amount of life insurance coverage you should carry.
1. The “lump sum need” method calculates the amount needed to pay:
- Outstanding debts
- Funeral expenses
- Household expenses
- Emergency needs
- Educational costs
2. The “income replacement” method calculates the amount needed to replace a percentage of your income for a specific number of years, usually until your youngest child is out of college or until your mortgage is paid off.
In addition to these two methods, you may want to consider other needs. For example, would you want to provide the financial means so your spouse wouldn’t have to work for the first year if you will not be around to provide income any more.
Calculate future spending
In determining your family’s future financial needs, remember that you don’t have to provide 100% of the income that will be needed. For instance, if you’re planning to provide $100,000 for your child’s college tuition in 15 years, you don’t need $100,000 now – you need an amount that will potentially grow to $100,000 by the time college starts, many time it also needs to take both economic and educational inflation into account.
Having your policy’s cash value potentially grow over the years to cover future expenses is one big advantage of permanent life insurance.
Please feel free to use our insurance planning tool, link to Nationwide life insurance company, to find the right amount for your budget and your peace of mind.
Zion is a fiduciary advisor, meaning we are legally authorized and required to provide objective, conflict-free guidance to help businesses meet their legal responsibilities under ERISA. Please contact us for an evaluation and analysis for which retirement plan is the most suitable long-term plan for you and your business.
Ready to take the next step?
Determining the right insurance coverage suitable for your needs is an important decision. A professional producer can analyze how changing economic and personal situations may affect you, giving you timely financial information and peace of mind – which ultimately helps you select the investments that fit your needs.
Our risk management using life insurance planning and services include:
- Plan design review
- Life insurance options selection
- Full, integrated back-office support
- Cost containment
- Plan compliance
We also provide comprehensive participant support, including ongoing education and practical support for employees. From enrollment meetings to educational seminars to phone support, we strive to help your employees prepare for a secure, comfortable retirement.
DISCLAIMER: Note that Per WAC 284-23-240 (3) compliance requirement, Mr. Wen-Liang Huang is doing insurance business as an insurance producer under the name of Wen-Liang Huang and IS NOT doing business as (DBA) Zion Financial Planning, LLC.