The answer to this question differs from one person to the next.
Consider the following:
► What would be the financial impact on your family if they lost 100% of your income?
► What would be the financial impact on your family if they lost 75% of your income?
► What would be the financial impact on your family if they lost 50% of your income?
Answering these questions will help you decide what percentage of your income you will need to provide your loved ones. In addition to this amount, you need to consider the rate-of-return you believe that your loved one’s can earn on the invested death benefit.
The chart below will help you to decide how much life insurance to purchase:
First choose the amount of annual income you would like to provide annually in the left column of the chart.
Now, select the average rate of return from the top rows that you feel your loved ones can earn on the invested death benefit. From there, run your finger down the column to the desired income you selected to see the amount of life insurance that you should buy.
Replacement Income Table
|Desired Annual Income to Replace||What Average Rate of Return Do You Feel Your Investments Will Earn?|
|Below is the amount of Life Insurance needed to produce the income desired|