How much life insurance?

Rough "rules of thumb" suggest an amount of life insurance equal to 6 to 8 times annual earnings; however, many factors should be taken into account in determining a more precise estimate of the amount of life insurance needed.  Important factors include:

1. Income sources (and amounts) other than salary/earnings.
2. Whether or not the individual is married and, if so, what the spouse's earning capacity is.
3. The number of individuals who are financially dependant on the insured.
4. The amount of death benefits payable from Social Security and from an employer-sponsored life insurance plan, whether any special life insurance needs exist (ex: mortgage repayment, education fund, estate planning needs), etc.  It is recommended that the person's insurance adviser be contacted for a precise calcualtion of how much life insurance is needed. 

Learn about the various types of life insurance.