Reader’s Question:

How much is the right amount of life insurance coverage that I should buy? I will be speaking with some insurance agents here in Miami, Florida about a policy soon and I want to know what kind of policy I should look for. Thanks!

Fleur

Miami, FL

The right amount of life insurance coverage that you need to get should be dictated by your personal financial goals and needs as well as those of those who rely on you for financial support. There are many so called “rule of thumbs” out there that dictates that you have to get at least buy a policy that has 10 or 20 times as much value as what you earn in a year, and while these are very good suggestions it may put unnecessary pressure and costs on your behalf just to meet these requirements. Also remember that we all have unique financial needs, obligations and situations so whatever life insurance policy you choose there in Miami, Florida should reflect that.

Let’s begin by focusing on why you would need life insurance in the first place. Here is a short list of questions that would guide you in determining the right kind of life insurance coverage:

• Do you have any dependents or kids? How much money would they need if you want to put them through college?
• Are you still paying mortgage? How much debt do you have left? How much money would you need to pay for these to avoid foreclosure or defaulting on your loans?
• How much does your household spend monthly? Annually?
• Do you want to make sure that your funeral costs are covered so as not to burden family or relatives in the event of your untimely death?

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