How Much Life Insurance is Needed?

How Much Life Insurance is Needed?
How Much Life Insurance is Needed?

This part is easy -- if you’re purchasing life insurance to help pay off your home or other debts, make sure you have enough coverage to pay off the full amount of your debt at death.  But before you make a decision, take time to plan ahead – if you see a potential increase in your debt in the near future think about buying more coverage up front to avoid having to buy a separate policy later... with a potential second round of medical underwriting.

Increasing Insurance

Some common life events are potential triggers to increase the amount of coverage you need to purchase. Consider carefully if you plan to use life insurance for:

  • College tuition expenses for several children.
  • Paying off all debt AND provide an ongoing income.
  • Providing a sum of money that will generate an income without depleting the principal amount. As opposed to gradually spending down the life insurance over time.

Decreasing Insurance

Here are some things that could reduce the amount of coverage you may need to purchase:

  • Employer-provided life insurance (as long as you’re employed)
  • Spousal income
  • Social Security Benefits
  • Other personal savings

While these may reduce the amount of life insurance coverage you buy, make your estimates conservatively. It’s better to have too much coverage than too little.

Get a Price Quote

Once you’ve got an idea of how much insurance coverage you need, here’ s a free tool you can use to start figuring how much the coverage will cost you.  Use our Life Insurance Calculator.

Life insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN), ReliaStar Life Insurance Company of New York (Woodbury, NY) and Security Life of Denver Insurance Company (Denver, CO). Within the state of New York, only ReliaStar Life Insurance Company of New York is admitted and its products issued. All companies are members of the ING U.S. family of companies.