Should I get life insurance and how much would I need?

Financial Advisor Christine Neilson shares advice for parents on the importance of having life insurance and how to figure out how much is necessary to protect your family
Should I Get Life Insurance And How Much Is Enough
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Should I get life insurance and how much would I need?

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Life Insurance is definitely needed if you have dependents. The purpose of life insurance is to leave a benefit for someone else. It's not for you. The amount of insurance you need really depends and varies on what your personal goals are. A lot of people use the general rule of thumb of seven to ten times their salary, but that doesn't take into account personal circumstances. First thing we want to establish is. Is it for a specific use or is it a replacement of income or both. A specific use may be paying off a mortgage, paying for a college fund for minor children, whereas, future income is, if you have minor children, replacing the income of that parent or parents. For a specific use, for example, if you had a mortgage of $500,000 that had 20 years left on it, a 15 to 20 year term life insurance policy would cover that need. It's simple. If it's for replacement of income, the first thing you need to establish is, what is the amount of income we are trying to replace. For example, if we are trying to replace $60,000 of income annually based on a return of 4 percent, we would be looking at a policy of $1.5 million that you would need to replace that annual income each year.

Financial Advisor Christine Neilson shares advice for parents on the importance of having life insurance and how to figure out how much is necessary to protect your family

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Christine Neilson

Financial Advisor

Christine Neilson is from London, England and moved to the United States in 1991. She has a BA with honors in Business Studies with an emphasis in  Finance from South Bank University in London. Prior to moving to the United States, Christine worked in the computer industry for seven years as an operator and programmer before becoming a Surveyor specializing in commercial real estate appraisal, acquisition and development.  Having recently obtained her California and Washington real estate licenses Christine is merging her extensive financial advisory and real estate experience to provide unique expertise to clients.

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