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Exploring Life Insurance Coverage using LIFE

Everyone knows they should get life insurance but how much do you really need? It’s a difficult question, but it’s one that your financial dependence and family count on you to get right.  Luckily the answer is easy when you use the acronym, LIFE. 

L I F E stands for Liabilities or debts to be paid, Income to be provided, Final Expenses to be paid and Education and other goals to be funded.  Your insurance coverage combined with any assets that would be available upon your death should be equal to more than these 4 things combined. Lets go thru them…

L - stands for Liabilities

consider any outstanding debts your family would need to pay off, such as a mortgage, car loan, credit cards, etc.

I – stands for Income 

Think about whether your family will need to replace your income in the event of your passing. A good rule of thumb is coverage equal to 7-10 times your annual salary to cover survivors’ ongoing living expenses, savings needs and emergency fund.

F- stands for Final expenses 

Do you have the resources to cover funeral expenses?

E- stands for Education and other goals to be achieved

Determine if you need to allocate funds to put your children through school or have any other goals you want to achieve. 

By considering these factors, you can determine the appropriate amount of life insurance you might need to protect your family’s future. And of course, we recommend you revisit these, if your life circumstances change.

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