How Much Term Life Insurance Should I Purchase?

Though there is no exact formula to follow to determine how much term life insurance you should buy, many experts offer the following advice: insure your life for an amount between seven to ten times your annual income. For example, a family with an annual income of $50,000 may choose to purchase a term life insurance policy between $350,000 and $500,000.

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You can also choose to determine your policy amount based on your assets and expenses. Determine a rough estimate of your family's monthly budget. Include all expenses from mortgage, to groceries and gasoline, to child care, to vacations. Then, estimate your total assets (savings, social security, etc.). Then subtract your assets estimate from your expense estimate, and you have an estimate for your term life insurance policy needs.

Remember, stay-at-home parents contribute a great deal of services to their families, free of charge. In other words, dad may stay home to take care of the kids during the day for free, but a day care service certainly won't watch your children for free. Keep such factors in mind when calculating your term life insurance needs.

What Factors Increase the Policy Amount?

If you believe you may have extra factors in your life that may require an increase in your policy amount (financial obligations, etc.) speak with an agent for more details.

What Factors Increase the Term Amount from 10-20 Years?

Your terms lengths for term life insurance are determined largely by your motives for buying life insurance in the first place. People who buy term life for 10-20 years may want to cover their business ventures or provide financial security for their family while the kids still depend on them financially.

What Factors Increase the Term Amount from 20-30 Years?

People who have mortgages they want to protect often choose 20-30 year policies. See our mortgage protection term life insurance page for more details.

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Term Life Insure provides information at no cost concerning insurance products and services but is not an insurer or an agency. Please speak to your insurance agent for more information. Not all products are available in all states.