Reader’s Question:
I know I shouldn’t be concerning myself with this, but I just think want to be sure. I’m from Portland, Maine, and I just want to know if there is a specific amount I am required to buy for a life insurance.
Brian
Portland, ME
Brian, it is never really too early to be thinking about life insurance. It is always better to have insurance even though you have no need of it than go through the hassle of not having yourself insured, not to mention all the trouble your family would be having. It is always better to plan ahead.
Anyway, to answer your question, there are different rules set by different life insurance companies. Some would require you to avail of life insurance which is a certain amount multiple to your annual income. But the best thing to do is to just think of what would fit your needs in consideration of the people you would be leaving in the event of your death.
Estimation of your life insurance proceeds could be quite tricky. I suggest that you make a list of the possible expenses you could be having in the event of your death. Examples of the things that might be included in this list are education, mortgage payments, household expenses, etc.
Still, making this list could be difficult for you. In this case, you might want to consider seeking the advice of a financial planner there in Portland, Maine. Or you could check out Web sites of financial or life insurance companies and use their calculators there.
If you are successful in making this list, then you would have a certain idea of the expenses. But since the estimated amount changes over time because of various reasons, it is highly advisable to reassess your estimates every now and then.