Ameritas Advisor Services

Life Insurance Needs

How Much is Enough?

We'd all like to know the answer to the question: How much life insurance is enough?  And we want a simple answer. Not pages of questions and complicated formulas. Employers generally offer two or three times income as a group life insurance benefit. Many industry experts recommend five to 10 times income. Unfortunately, there truly is no cookie-cutter solution to how much life insurance your client needs. No single rule-of-thumb that can determine how much is enough.

Tough Questions
The key to providing your client and their loved ones with an adequate safety net is asking and answering some tough questions:

• Debts-What is the amount of any mortgage? Student loans? Credit card debts?
  
  
• Children-What will the cost of education be? Will the children go to a public or private school? Should there be a separate policy to provide coverage for children from a prior marriage?
  
  
• Retirement and Lifestyle-What standard of living will the survivors maintain? Will it be at the same level including amenities like vacations and club memberships? What will the spouse's retirement lifestyle be like? How much has been accumulated for retirement for each spouse? How long will that last?
  
  
• Other Considerations-Did you, or should you, consider other dependents, such as elderly parents? Do they own a business? Do they have a family member with disabilities? How much do they hope to leave to their heirs?
  

Use our Life Insurance Needs calculator to help determine how much insurance might be right for you to recommend. For personal assistance, call our salaried professionals.