Know The Answer To This Question… How Much Life Insurance Is Enough?

Determining the correct amount of life insurance protection can be a mystery to many.  Recent studies show that most adults continue to lack adequate amounts of coverage – and close to two-thirds admit to not even having a personal life insurance agent.

Agents who can help their clients determine how much life insurance is needed can become true trusted advisors.
Here are some effective ways to determine how much life insurance may be needed.

• Multiple-Earnings Method — Measures the life insurance need as a multiple of annual earnings, usually somewhere between four- and eight-times annual salary.
• Human Life Value Method — Measures the present value of the lost future income stream to dependents at the death of the insured.
• Comprehensive Needs Analysis Method — This method considers immediate cash needs, debt and mortgage cancellation, income replacement, and college funding needs.
• Measures the amount of capital (at some appropriate rate of return) necessary to replace the decedent’s income contribution to the family.

Part of our job as insurance professionals is to help our clients and prospects identify needs they may have previously overlooked.