How Much Life Insurance Do You Need?

Even though thinking about death is not a very pleasant feeling, the fact is that one needs to ensure that the loved ones are protected and looked after in the event of an unfortunate and unexpected incident. The reality of this cannot be negated by anyone. However, the amount of life insurance cover that you need and the amount that you can afford depend on various factors.

The first thing that you need to calculate is the amount that you want to insure yourself for. You will therefore need to take into account the current lifestyle that you have and the approximate monthly expenditure that you incur. This should include large ticket items like rents, monthly instalments of loans, household expenses and incidentals. Add to that the expected inflation and other expected changes in your life like the expected birth of a child.

You would obviously like to leave the maximum amount for your loved ones. However, the life insurance cover that you choose will also need to depend on the amount that you earn. This is because you will need to pay a premium for the life insurance. Therefore, in a manner of speaking, irrespective of the life insurance cover that you want to take, it is the disposable income that you have that also decides the cover.

However, it is also a fact that you should review the life insurance cover that you have to upgrade or add to the life insurance that you already have. While you can do this every other year, an evaluation of the life insurance that you have becomes mandatory at watershed events in your life like a marriage, the birth of a child and child leaving home too since these can affect the life insurance cover that you may need.

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