INDUSTRY INSIGHT
LIFE INSURANCE
SPONSORED CONTENT
HOW MUCH
LIFE INSURANCE
DO YOU NEED AND WHAT TYPE ?
Industry experts recommend having life insurance coverage of 5 to 10 times your salary . To many of us , that sounds like a lot of money ! But after taking a closer look you may realize that it can actually be a pretty conservative estimate .
SOME OF THE CONSIDERATIONS
1 . Replacing salary in the home .
One of the most basic approaches to determining life insurance is to figure out how much you need to last a certain number of years when your salary won ’ t be coming in . This involves calculating a person ’ s “ time to retirement ” and how much money he / she is projected to earn in the next 5 , 10 , 15 , 20 or more years . Another way is to estimate the household yearly expenses and multiply that by the number of years you ’ ll need coverage . This is a fairly straightforward way of doing life insurance calculation .
2 . Living on interest .
There ’ s another interesting idea that a lot of experts have put out there : the idea that with a large enough death benefit ( what the policy pays out ), a family would be able to live on the interest of the death benefit for a long time . For example , a death benefit of $ 1 million would generate $ 50,000 per year from a 5 % interest rate . Evaluate the current stock market , trust fund and investment fund opportunities to see if there is an investment opportunity that would give something close to 5 %. After adjusting for market circumstances , you can figure out how your household might achieve capital gains on the proceeds of a life insurance policy that ’ s roughly even with the projected salary .
3 . Age of dependents . The age of your children / dependents should factor into your coverage . For example , if your dependents are 15 and 17 years old , you may only want a few years of coverage . On the other hand , those with younger children will want policies that provide for a much longer time .
As you can see , when it comes to life insurance , there ’ s a lot to consider . If you ’ re going to do it , then do it right and get the amount you need . After all , that ’ s just what this is — insurance and assurance that your loved ones are properly cared for . The Anthony Passarelli Insurance Agency wants to help you . Please call us at 412.385.4091 or stop by at 1312 William Flynn Hwy . in Glenshaw where we ’ ll assist you in making the decisions that are best for you and your family .
This Industry Insight was written by Anthony Passarelli , owner of the Anthony Passarelli Insurance Agency .
It is Anthony ’ s mission to help customers like you find the best coverage for your unique needs . He has worked to personalize and simplify the insurance process to give you all the knowledge you need to make your decision . Anthony Passarelli has the knowledge and experience to help you better understand your coverage options — auto , home , life , renters , business insurance and more .
Shaler | Summer 2017 | icmags . com 17