Our agents here in Bourbonnais, IL, at George Ryan Jr. Insurance Group Inc., understand insurance. Our experts are here to offer tips to determine how much life insurance coverage you need.
1. The 10 Times Income Guideline
While a good starting point, the ten times suggestion fails to look at savings, existing policies, and your family’s needs. Furthermore, it neglects to consider your spouse’s contribution to the household as income to this figure to cover their efforts that someone else would have to be paid to do. This includes child care, cleaning, shopping for household necessities, etc.
2. Add $100,000 to the 10 Times Figure Per Child
Another layer to the "10 times income rule" involves including more coverage for your children’s education. College tuition, books, and related expenses are increasing annually, but your insurance policy can keep their dreams of attending in sight.
2. Use the DIME Formula
The DIME formula is an acronym for four key components to consider in the realm of life insurance. It stands for:
- Debt & Final Expenses
- Income
- Mortgage
- Education
The formula encourages you to look closer at your financial situation than other approaches. Adding all of these costs and obligations together provides a more accurate view of your coverage needs.
4. Replace Income Adding a Little Cushion
You’ll want to get enough coverage to allow beneficiaries to cover your income without spending all the payout immediately. Add a little extra for them to save or invest while using the rest to pay expenses like paying off the mortgage, paying college tuition, or starting a retirement account.
Looking for Quality Life Insurance Coverage?
George Ryan Jr. Insurance Group Inc. offers life insurance for individuals and their families if they live near the Bourbonnais, IL region. Call us today, or visit our local physical office to learn more about services and get a quote.
