Life insurance provides financial security to your loved ones after an untimely death. Lee Insurance Agency LLC explains that the right life insurance coverage amount in North Carolina depends on several factors that you need to consider, such as your income earnings, outstanding debts, mortgage payments, education expenses, and financial goals.
Determining Your Life Insurance
1) Calculate Your Income Replacement Needs:
The first factor to consider while deciding on the life insurance coverage amount must be your income replacement needs.
Remember, the coverage amount should be sufficient to replace at least 10-12 years of your income. For instance, if you are making an annual income of $50,000, multiplying this by 12 years means your life insurance coverage should be a minimum of $500,000.
2) Outstanding Debts:
After calculating the income replacement needs, the next factor to consider is outstanding debts. A life insurance policy can help your family pay off outstanding debts such as a car, credit card, or personal loan.
3) Mortgage Payments:
If you have a mortgage on your house, include the amount required to pay off the mortgage. Losing a breadwinner can be stressful enough, and the sizeable mortgage payments could take a big chunk out of your family’s finances.
4) Education Expenses:
If you have children, include their education expenses when calculating the life insurance coverage amount. College can be expensive, and you want to ensure your children can complete their education. Review the estimated costs of their education and include this amount in your coverage.
We Are Here To Help
Determining the right life insurance coverage amount can be a difficult task to undertake in North Carolina. Remember that having enough coverage can save you and your family from a significant financial crisis. Contact Lee Insurance Agency LLC today, and we’ll help you.