How Much Life Insurance Do I Need?

The answer isn't really how much life insurance you need. It's how much money your family will need after you're gone. Ask yourself:

• How much money will my family need to meet immediate expenses, like funeral expenses and debts?
• How much money will my family need to maintain their standard of living over the long run, including college expenses, weddings and retirement?

Life insurance proceeds can help pay immediate expenses and outstanding debts, and can help cover future financial obligations. To estimate how much you need can seem overwhelming. While a general rule is to have an amount seven to 10 times your annual income, completing a needs analysis can give you a more accurate picture.

Here's how it works:

• Start by evaluating your family's needs
• Estimate what your family would need to meet current and future obligations
• Add up the resources your surviving family members could use.

The difference between your obligations and resources indicates how much life insurance you need, as displayed in the diagram below.

Current and future financial obligations

Existing resources Including survivors' earnings, savings and investments and life insurance that you already own.

Life insurance needed

For some extra help, check out our life insurance needs calculator. It will provide you with an estimate of your insurance needs in a matter of minutes.

Every situation is different, so contact an Amica Life representative at 800-234-5433 for professional assistance in determining your particular needs.