The Wrong Ways to Figure Your Life Insurance Needs

The Wrong Ways to Figure Your Life Insurance Needs

There is a right way and a wrong way to determine the amount of life insurance coverage that you need. Try to avoid these common pitfalls:

  • Not adequately accounting for your beneficiary's debts
  • Buying enough coverage to pay only for current debts may also provide inadequate coverage, because it does not account for the loss of your income
  • Estimating how much you will earn until retirement, with interest, may actually result in too much insurance coverage

The 360 Degrees of Financial Literacy Web site offers general information for managing personal finances and does not recommend specific financial actions.  For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor.