New York Life Insurance

• What is your income and how many people depend on it? If you live alone and have no children or other dependants this one is easy because you may not need to replace your income for anyone. However, if you have a wife and three kids you may need to deeply consider this. A prudent planner factors their salary times the number of dependants (include spouse working or not) times two. So a single income family of four making $50,000 would add a need of $300,000 to their life insurance.

• What is your value? If you don’t work for money, but people depend on you, you still must insure your “income” though it is not actual. For example, a stay at home parent may not have an “income,” but activities such as child care, house cleaning, mean preparation, etc. can only be replaced with money. If you are married and your stay at home spouse passes unexpectedly you are going to need to pay a babysitter, housekeeper, etc so that you can still work. You need to find out just how much stay at home mom/dad is worth.

• Final expenses? – In this day and age it is prudent to add between $5,000 and $15,000 for burial expenses.

• Any special gifts? – It is becoming more and more popular to designate a charity or organization as a beneficiary on your life insurance. A lot of people feel that this is a way that they can always be remembered. Please carefully consider this option with your insurance professional and designated charity.

By considering all of these factors together you can determine how much insurance you need. When you come to the calculation take a deep breath; it may look much greater than you think. Truth be told most family breadwinners with kids need at least $500,000 in life insurance to live prudently. Don’t worry new types of insurance and special financing options can make even great amounts of insurance very affordable.