How much life insurance it enough? How much will it cost?

When deciding how much life insurance is enough, you first have to ask yourself – enough for what? What do you want to accomplish?

Depending on your current stage of life, you may want the proceeds from your life insurance policy to do one or more of the following:

1. Pay off your mortgage
2. Pay for college education for your children
3. Provide income for your spouse/children for a certain number of years
4. Pay estate and final expenses
5. Provide an inheritance for your children/grandchildren

Here’s an example:

Suppose a 35-year-old employee has a 30-year-old spouse and two children ages two and five. Let's say that the cash needs at death included a $20,000 final expense fund, a $30,000 emergency fund, an $80,000 mortgage fund and a $160,000 education fund. These amounts total $290,000 of cash needs at death. Let's further assume that the family needs $3,400 per month during a two-year adjustment period, declining to $2,920 per month for the next 14 years until the youngest child turns age 18, and then to $1,942 per month for the rest of the surviving spouse's life. If we discount the stream of income needed at 4 percent, then $589,600 of capital would be needed to provide this income. Thus, the total funds for both cash and income needs would be $879,600. However, if you factor Social Security into the formula, the income need will be reduced.

How much life insurance, and which kind (term, whole life, universal life, etc.), can only be determined after you decide what you want to do, and how much you can afford to pay for it.

Call your financial advisor at Hagan Newkirk (501) 823-4637, to discuss your needs and find out what kind, and what amount is right for you. You can also send an email to: rrogers@hagan-newkirk.com, and receive a free, no-obligation insurance quote, if you already know what amount and what kind you are looking for.