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What Determines My Life Insurance Needs

Well it depends on your situation...

Replacing Annual Income

  • This may seem like an obvious reason to have life insurance, but it is extremely important to make sure that your loved ones are provided for in the case of a tragedy.
  • In 2014, the median household income was $53,8911

College Costs for Children

  • The cost of sending a child to college is increasing every year. Life insurance may be a way to fund your children's college education.
  • The average cost of private four-year college is $42,419 per year2.
  • The average cost of public four-year college is $18,943 per year2.

Value of your Services at Home

  • These services can range from child care to mowing the lawn. It is any service that would need to be replaced if you were no longer there to provide it.
  • Your services at home are often overlooked. If paid, a stay at home parent would earn $118,905 annually3.

Final Expenses

  • Final expenses are something no one wants to think about, but they can add up quickly.
  • The average funeral cost today is between $7,000-$10,0004.

Debt (Mortgage, Credit Card, etc)

  • Life insurance death benefit proceeds are federal income tax free, and may pay off or reduce any outstanding debt.
  • The average American home mortgage debt is $155,1925.
  • The average credit card debt per household in the United States is $15,6115.

Employer Provided Benefits

  • Any employer sponsored life, health, or disability insurance benefit may have to be replaced in the event of a tragedy.
  • Over the past decade, health care premiums have risen 89%6.

These are just a few factors that may go into determining your life insurance needs. Remember, the best way to make sure your life insurance needs are met is to meet with a financial professional who is a qualified life insurance agent.


1 http://money.cnn.com/2014/08/20/news/economy/median-income/
2 http://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2014-15
3 http://www.salary.com/2014-mothers-day-infographics/
4 http://funeral-tips.com/funeral-costs-how-much-does-an-average-funeral-cost/
5 http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/
6 http://kff.org/report-section/2013-summary-of-findings/