“How much life insurance coverage do I need?”—This can be a tricky question, but there are a couple of ways to go about finding the right amount that you need without wanting to pull your hair out!
You can calculate how much you need and base the question on what kind of financial picture you find yourself in now, and what kinds of financial milestones you will want to cover. This can be a useful method if you have children or are a meticulous person— but I know that some of us would like a simpler method.
A more elegant solution to this question is just buying coverage equal 5 to 10 times your annual salary, so if you make $60,000 per year you’ll want to have a policy of $300,000 to $600,000 depending on how much of a premium you’d like to pay per month.
Using either of these methods, anyone can establish the amount that they think their family will need in the event of their passing. You can include things like college tuition, ability to pay estate taxes, and even other expenses like a first car for a child or grandchild— just be sure to calculate it in before making your decision!