Wheeling, IL (PressExposure) March 04, 2010 -- AccuQuote, a leader in providing term life insurance quotes to people across the United States, reveals how much life insurance is needed to protect a family's financial future. The company provides key factors that should be considered when choosing an appropriate term life insurance coverage amount.
As a rule of thumb, experts typically recommend having 10 to 15 times a consumer's annual salary in life insurance coverage. However, one should conduct a life insurance needs analysis, based on their current and future financial needs. This can be done using a life insurance needs calculator.
"Life insurance isn't a one-size-fits-all product," says Byron Udell, founder and CEO of AccuQuote. Rules of thumb are helpful to keep in mind, but they shouldn't be relied on, he adds. "For example, if you're single without dependents, you won't need as much life insurance coverage as someone who is married with children."
AccuQuote provides key factors that should be considered when shopping the market for term life insurance:
- Annual Income - "Your annual salary is probably your family's most important source of income, so you need to make sure your death benefit amount reflects it accordingly," says Udell. "But there are other sources of income to consider as well, such as your spouse's take-home pay and your savings accounts. By calculating these amounts, you'll be able to choose an appropriate coverage amount that will allow your family to continue living the lifestyle they're used to, should you die today."
- Mortgage - "If you have a mortgage, make sure the death benefit amount includes your monthly mortgage payments," says Udell. "Helping them pay off the mortgage in full will help them avoid financial stress when you're no longer around."
- Debt - It's not uncommon to be in debt these days. In fact, almost every American has some type of debt, whether it's credit card debt, loans or medical expenses. "Make sure your family has enough coverage to pay off these loans when you die," says Udell. "It's also important to take out more life insurance coverage as you accrue more debt."
- College tuition - Experts recommend having enough life insurance coverage to help children through college, including tuition, living expenses and extra fees.
- Everyday living expenses - Everyday living expenses include childcare, utility bills, extracurricular activities and more. "Don't leave these out when you're assessing your family's future financial needs," says Udell.
- Funeral costs - Funerals are one of the most expensive consumer purchases. In fact, it's not uncommon for a traditional funeral to cost $10,000. "Since $10,000 isn't pocket change for most people, make sure you leave your family enough money to pay for the funeral," says Udell.