I think the easiest way to approach this is to carry $25 million or so and just suggest to your spouse that if you die prematurely, and the $25 million seems too high, give some to charity. Or buy a new spouse with a longer life expectancy!!
OK, OK. That really isn’t my first recommendation. We’ve discussed before the types of things that should be considered in a needs analysis. Income, assets, retirement accounts, social security, etc, just to name a few.
Just to get your head going in the right direction I am going to offer a few links to life insurance needs calculators. Just keep in mind that none of these should be taken as gospel and the best way to get a true picture is to team up with a financial advisor and an independent life insurance agent.
But, here’s a few calculators I scared up. MSN offers this one. A student financial aid site offers a slightly dated, over simplified option . And finally Ipipeline , a company that provides life insurance forms and quote engines, offers this version. My preference would be the last one, just in case anyone cares what my preference is.
Bottom line. Don’t get bogged down in the calculating and worrying that you will buy too much. Rarely does someone buy too much using their gut instinct. Put what your gut tells you in force and then re-arrange it while you are insured.
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.