Some financial service companies and consumer organizations suggest that you need a face amount of life insurance that equals at least five times your current earnings. Actually, each situation is different, and the amount you need will depend on your particular circumstances. Your financial professional can help you decide how much life insurance you need.

General Considerations

When You're Younger

You need plenty of insurance if you have young children or there are others who depend on you. Your financial professional can help you decide which type of life insurance is right for you. Review the different options presented in this section. You should count on keeping a good deal of insurance on your life until the children finish school or leave home, whichever comes first. After that, your life insurance needs will depend on your unique personal and work situation.

When You're Older

Once you retire, you should have retirement savings, and Social Security, but you should still consider the need for life insurance after you retire, if you fall into one of the following categories:

• You had children later in life. It's wise to keep life insurance at least until the child completes school.
• Your spouse couldn't live on your retirement savings, personal savings, and Social Security. If you think an additional death benefit will help your spouse if you predecease him or her, keep the life insurance.
• You have a sizeable net worth. Life insurance can play an instrumental role in reducing your estate taxes. If you have a sizeable estate in excess of the asset exclusion amount, purchasing life insurance to pay estate taxes may be part of your estate planning in transferring wealth to your children.