Lot of people decide they should purchase life insurance to make sure their family has money in case they pass away. Like the sign says in the old insurance agent’s office, no widow ever complained that she had too much life insurance! Of course, in these days of two incomes, both moms and dads are making sure they are covered. But as the family breadwinners are looking into buying policies, just how much coverage should they purchase?

What do you need to cover?

A home mortgage is a starting place for many people. How much money do you still owe on your home, and how far would your spouses income go towards making payments. Many breadwinners want to make sure their family can stay in their home if they lose one income. In fact, a home mortgage is one of the primary reasons that people start looking into buying life insurance. Even if the decision makers in a family decide that the home must be sold if one income earner passes away, it is still important to give the other decision maker time to keep the mortgage payments current for several months so the home can be sold for a good price, and not in a panic. Other debts and obligations are also considered. Do you still have car or credit card payments? Do your kids go to a private school or need special services? If one breadwinner passed away, could the rest of the family continue with their current lifestyle. What things are the most important to continue? Of course, normal bills like food and utilities need to be added in. How much does it cost just to keep the electricity and phones turned on? What about the future? Do you plan to help your children go to college, or would one spouse need more education to help replace the salary of the covered spouse? What other services would you need if one spouse passed away? If you need to eat out more, or provide for paid childcare, consider that too. Sometimes one spouse does not earn income, but provides services that would cost the family a lot of money.

Of course, the idea here is not to make money or get rich from life insurance. We are just trying to replace the income and services that a breadwinner or service provider gives to the family. Even if it is not reasonable to expect life insurance to replace the income of the covered person, it is reasonable to expect it to provide enough coverage to be able to transition to another lifestyle in as painless a way as possible. If you consider your life insurance needs, you will be able to find an affordable policy that can provide security for your family.