Insurance: How much is too much?

Life insurance

Life insurance is not always necessary. If there are no people depending on you financially (i.e. if you are single and childless), then you don’t really need such coverage. However, if you have a family, it is important to carefully assess their needs. The total amount payable should equal your family’s immediate cash and income needs. Immediate cash is determined by outstanding debt (mortgages, personal loans and credit card balances), estate costs (legal fees, burial expenses, income/inheritance taxes),education and emergency funds. Income needs makes reference to the inflows your family will need to maintain a standard of living. Such an amount and an increasing interest rate should be determined in the policy. You can decide whether you want your family to receive one single amount or periodical income.