How Much Life Insurance Coverage is Needed?
Required coverage amounts vary wildly from person to person and situation to situation. However, many insurance professionals state that a general rule for death benefits is to cover 5 to 7 times the yearly salary of the insured. However, this can easily be too much, or too little. True need is determined by the calculation of such factors like income replacement for surviving spouses, money to pay debts including mortgages, funds for tuition costs, dependent child or adult care, taxes, charitable donations, and other financial issues must all be accounted for in order to calculate how much life insurance coverage is needed.
