When the time comes to buy that first life insurance policy, knowing how much insurance you need means some careful calculations and considerations. It is important that you understand all of the factors when you choose a policy limit. If you are the primary source of your household’s income, you need to be sure that you include a sufficient amount in your policy for income replacement. Think about how much of your annual income is typically applied to household costs, or how much your surviving family members would have to receive in order to make ends meet after paying your funeral costs.
Make sure that your policy also includes enough to settle any of your debt that is not already protected by supplemental insurance. Finally, consider how much additional would be helpful for your family to have money for expenses while they learn to adjust to daily life. You may decide that you want trust funds for your children. If so, include this amount in your policy limit as well, and specify the calculations in your will. For more details about your policy and coverage options, contact the Insurance Agency of Dean Davis today.