How Much Life Insurance Is Enough?
How much life insurance depends…? If you are single with no dependents, you probably don't need any at all. The key time to get life insurance is when you have children. In addition, get extra coverage if you have a spouse who doesn't work.
A rule of thumb for life insurance cover is five to ten times your annual salary.
Here are some tips:
Do not buy life insurance for young children. It's largely wasted because you're not replacing income.
Look at your budget before committing to a premium. When you buy life insurance, you have to keep paying the premiums throughout the term, no matter what, or lose your coverage.
Don't let a life insurance policy lapse if you plan to buy another one at some point. A high number of lapses could indicate financial instability.
You might be able to drop your life insurance if your children are grown and your spouse has income.
An insurance policy is only as good as the company that backs it, so check out the insurance company's financial ratings before you sign on. Avoid advisers who say the ratings are unimportant or unavailable.