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Life Insurance Death Benefits by Life Stage

No matter how you look at it, there is no easy way to determine how much life insurance you need to carry. In reality, there is no wrong number; there are simply numbers that would pay off all your debt and keep your family comfortable and other numbers that might just pay for your burial and not give your family anything. But the amount of life insurance coverage you want to consider could depend on your stage in life.

Recent college graduate: If you have recently graduated college then you have bills. You probably have student loans, credit card bills and maybe even a car payment. Each of those bills should be taken care of by a life insurance policy you buy. In addition, your policy should pay for your burial.

Single adult: As a single adult you may have a mortgage, car payment, student loans, credit card balances and furniture that you still owe money on. In order for your estate to avoid being a burden on your parents and loved ones, your life insurance policy should pay off all this debt and supply payment for your burial expenses.

Newlywed: As a newlywed you have much the same debt as you did as a single, but you also have a spouse who is depending on your income and contribution to sustain his or her daily life. So in addition to having a death benefit that pays your debt off and your burial expenses, you should consider it supplying enough money to supplement your income for your spouse.

Parent with young children: With young children, your life insurance policy should pay off all debt your spouse would be left with, should pay off your burial expenses, should provide income supplement for your spouse and should leave a little behind to help your children deal with your loss. Money for counseling, private school tuition and any other needs your spouse might not be able to afford alone.

Parent of teens: With teen children, you must consider all of the above expenses and you should think about college tuition for your children as well as leaving them a legacy.

Pre-retiree: As a pre-retiree, you have a spouse whose retirement partially depends on your financial contribution. So while your life insurance policy should pay off all debt it should also make a contribution to your spouse’s retirement funds.

Retired senior: As a senior, you may begin to simplify your life insurance needs. You likely have less debt than you did, your children are through college, and your retirement has already begun. Consider buying enough life insurance to leave a legacy for your family and ensure your spouse lives the rest of his or her days comfortably.

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