It depends on the purpose. Do you need coverage for a short term debt/obligation, income replacement for the family, cover college expenses, estate and inheritance taxes, charitable gifting, or funding for a business buy-sell agreement?
A basic simple calculation for personal / family needs may be 10 to 20 times earnings. Keep in mind future salary increases and inflation. The following life insurance industry website is a great source for help with these answers and a calculator to give you a better idea in your planning. It also includes a discussion and a calculator for Disability Income insurance as well as Long Term Care information. http://www.lifehappens.org/life-insurance
Guess what. You see that the DOW lost another 1000 points. Can you take the ride? What Top 25 Stocks or Mutual Fund picks in last years financial magazines are in their recent additions? Life Insurance can also be a very economical tool to proved guarantees that offset market losses, especial if a death occurs at the wrong time.
And despite what some articles may say about cash value insurance, given time, “over funding” a Whole Life, Universal Life or Variable Life policy to supplement retirement income for a business –large or small- can also be a very effective financial plan by making tax favorable withdrawals and /or loans from the policy. This option can also be used to fund a Key Person insurance policy.
If the need is there, look to life insurance as a cost effective way to provide the financial resources-and when they’re needed. You can then look at your options of what type of plan to use (Term or Permanent Insurance). Having a professional life insurance representative to assist in personal planning will give you a better picture and the ability to offer suggestions and solutions.
