Investing in life insurance is one of the most important decisions you can make, especially if your goal is to protect your family and loved ones financially in the future. If you’re located in Midlothian, TX, you may be wondering how much life insurance is appropriate for your needs or your family’s needs after you’re gone. At Amy Tounget Insurance Agency LLC, we help clients calculate the right amount of life insurance based on factors such as age, preexisting conditions, and the type of financial support they wish to leave behind.
Use Basic Strategies
When calculating your life insurance coverage needs, consider these strategies:
- Income Multiplication: Multiply your annual income by 7 to 10 as a starting point. For example, if you earn $70,000 annually, you may need between $490,000 and $700,000 in life insurance coverage.
- DIME Method: Use the DIME method to calculate your needs. This includes:
- Debts and final expenses
- Income replacement needs
- Mortgage payoff dates
- Education costs for children
Subtract your savings and assets from these calculations to determine your coverage requirements.
- Age-Based Guidelines: Estimate your coverage needs based on your age:
- Multiply your income by 30 if you’re 18–40 years old
- Multiply your income by 20 if you’re 41–50 years old
- Multiply your income by 15 if you’re 51–60 years old
Choosing the right life insurance policy provides peace of mind, ensuring your family is financially protected when you’re no longer there to support them. If you’re considering investing in life insurance or reviewing an existing policy, we’re here to help. To determine how much life insurance you need to cover your financial obligations or debts in Midlothian, TX, contact Amy Tounget Insurance Agency LLC today.
