Having a life insurance policy is great to have peace of mind over your loved ones should your passing come at an untimely moment.
If you have dependents (people that depend on you for their survival), buying enough life insurance is pivotal to their well-being. It will replace the income that you would have gotten, and their way of life will remain the same. Your family may also need some extra money to make changes after you pass; they may wish to relocate, or your spouse may need to go back to school to be in a better position to help support the family, as well as the education for your own kids. Below you’ll find how to have a good idea of how much life insurance you’re going to need.
The DIME Equation
This equation may be the most important equation you’ll ever have to use! The DIME equation is an acronym which stands for Debt and final expenses, Income, Mortgage, and Education. Four areas that you should really consider when trying to get an estimate of how much life insurance you’re going to need.
- Debt and final expenses: Add up all your debt (not including your mortgage), and the cost of your funeral expenses.
- Income: For how many years after your passing will your family need support? Once you have that number, multiply it by your annual income. The multiplier could be the number of years until your youngest graduates high school.
- Mortgage: How much do you have left on your mortgage?
- Education: How much would it cost to send your children to college?
Leaving your family with as little worry about as possible is the best possible thing you can do for them. When it comes to finding the right life insurance policy that’s right for you, contact the insurance professionals at Massive Insurance or get an instant quote now!