Do You Know How to Calculate The Amount of Life Insurance You Need?
Jose Rosario MBA, MSFP, CPCU?, ChFC?, CLU?, WMCP?
Agency Owner serving the States of Florida and Georgia - State Farm Insurance Agent 833-425-6630
Learn how much Life Insurance coverage is adequate to help your beneficiaries overcome the financial impact they will face if you die today. (Versión en Espa?ol)
Most people have life insurance coverage in place, but what they don't know is if the amount they have will be sufficient to cover all the expenses their beneficiaries really need.
The Formula
A quick way to calculate is by putting together how much you owe in total debts you want to pay off. Add the portion of your take-home income you want to let your dependent receive (Consider the number of years they will need your income replacement). You don't necessarily need to include the part of your income you use for your expenses because you won't be around. Add burial or funeral expenses based on your desires. Add any amount you think will help your children cover future education expenses if this applies to you. Finally, add any other amount you want to leave to someone (Person, church, not-for-profit organization, university, or other like charity) if you wish. After calculating your total cash needed, you may deduct any asset your heirs will inherit from that amount. That will help them convert into money (Cash and Cash Equivalents). Then, you remove any other active life insurance benefit (Including any individual life insurance and group life insurance at work). You can click to access a?Life Insurance Online Calculator.
For Business Owners
For business owners, life insurance will help to fund a Buy-Sell Agreement to provide for the continuity of a business and protect the owner's family, partners, heirs, or any other interest party.?
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About the Author:
Jose Rosario is a Chartered Financial Consultant owner of a State Farm Agency in Orlando, FL. He is also a Chartered Property & Casualty Underwriter with a Bachelor in Finance and a Master's Degree in Business Administration. With more than 18 years in Life Insurance, he enjoys sharing knowledge with the community. His contribution has helped business leaders and families.
Jose Rosario, M.B.A., CPCU, ChFC, CLU
State Farm Agent
407-704-6655