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How much Life Insurance do I need for my family?

If you're wondering how much life


I'm gonna give you some specific ways

you can tell and figure out how much you


need I posted something to Facebook

about life insurance and I got this


comment from a reader that is just kind

of stuck with me


you know because I think the truth is

that most of us haven't experienced


something like this but this is real

life and unexpected stuff happens and it


would be wise of us to be ready for the

unexpected now I do need to add that I'm


not a life insurance agent I'm an

enthusiast I'm someone who's interested


in this stuff so definitely consult a

professional if you feel uncomfortable


making any decisions and just view this

content as educational and with all that


out of the way let's get to it


so the first in easiest way probably to

tell how much life insurance you need is


to actually use a calculator and

typically a calculator like this is


going to ask you a number of specific

questions about your financial situation


to help you determine you know how much

you actually need because this isn't a


one-size-fits-all answer and the

calculator that I use for this is over


at Policy Genius and I went ahead and

ran a sample scenario using this


calculator so you can kind of get a feel

for how this calculator works now we are


affiliate partners with policy genius so

if you do decide to use this and we'd


appreciate if you use our link because

it'll help support the channel support


our mission of what we're trying to do I

mean we'll have all those links up above


or down below in the description as well

and so to give it at this calculator all


you need to do is just click on this

page here and I will have a link up


above so you can get over there and then

they have a big button to calculate


coverage you can just click on that and

then it will get you started going


through this process so that is probably

the easiest and quickest way to get the


most accurate estimate for how much life

insurance you need now there are two


other fairly popular methods for kind of

determining how much life insurance you


need so we'll go ahead and cover those

now and one of them is called the 10x Rule


and basically the gist of this is

that you take your annual salary and you


multiply it by ten and that's the amount

of coverage that you need so if you make


$50,000 a year then you would want to

get $500,000 of coverage and I view this


more as a general rule of thumb maybe

like a more of a ballpark number to


consider because everybody's financial

situation is so much different if you're


you know in your mid-30s and you have

five kids and you have a wife who stays


at home and you

have much savings like that's gonna look


a whole lot different than if your

empty-nesters you know when you have a


big retirement savings and all your debt

paid off like those are two very


different scenarios and while rule of

thumb like this can give you a ballpark


to kind of consider and get started you

probably should dive a little bit deeper


to get something a little bit more

accurate for your specific situation and


that leads us to another popular method

of determining how much life insurance


you need and that is The Dime Formula

and in the case of this formula D.I.M.E.


stands for Debt Income Mortgage and

Education and these are the four factors


to consider when determining how much

life insurance you need and basically


this would work like this you would take

all the debts that you have exclude your


mortgage but just focus on all your

other debts and total them up and next


you would go look at your income and you

would figure out what your annual income


is and hopefully you know that and they

would multiply that by the number of


years that you think your family would

need support without you being there and


then after that you would look at the

mortgage and you would figure out how


much mortgage debt you have and they do

would take that number and then finally


for the education component you would

add up all of the estimated education


expenses for all of your kids and now

you would take all four of those numbers


and add them up for one grand total and

that is the amount of coverage that you


need and as you might be thinking even

with a formula like that there is


there's definitely some gray area and

there's some things that just aren't


really really clear and so that's the

thing it's like it's just an estimate


but the bottom line is that it's a whole

lot better to have some life insurance


than to have no life insurance so even

if you're underinsured a little bit it's


just far better than not having any

insurance at all alright so last week I


get a question from a reader asking this

I'd like to get your take on someone who


doesn't have a lot of debt in a nice sum

say for retirement in the need for life


insurance so question is basically this

do you need life insurance if you're


debt-free and if you have a big

retirement savings and I told her that


that's actually our situation pretty

much as well and so we have all of our


debts paid off and we have a decent

amount say for retirement but I have two


kids and a third on the way and I have

wife who stays at home with them and so


I think it makes a good amount of sense

for me to have insurance to kind of


cover my family now even if I wasn't the

breadwinner in the family there are


still things to consider like funeral

expenses because you would hate to have


to pull money out of your 401k or borrow

equity from the house to cover the


funeral expenses and especially with

life insurance particularly term insurance


being so cheap that it just it makes

sense to get it if you can and so


the next question you probably have is

what I had the first time I did this and


that is how do I get the cheapest policy

I don't want to pay too much for it I


won't give the cheapest policy that's

gonna get the job done and the answer is


that you need to shop around you need to

look at different insurance carriers


because they're all different in

depending on your actual situation


you're going to find a different rate

and this is why Policy Genius has been


my go-to recommendation after all these

years of looking at all these different


insurance sites because they do this so

well they let you compare quotes from


dozens of insurance companies all on one

page and then they could take care of


all the paperwork for you as well and

then on top of that they have


noncommissioned agents who will answer

your question so these guys are doing it


right and they really make it as simple

as it possibly can be so like I said


before we are affiliate partners with

them so you can support us by using the


links in the description up above down

below to get over their website and just


in case you think that I am recommending

them just because we're affiliated


partners the truth is is we could be

affiliate partners with any of the life


insurance companies out there and this

is actually the one from my years and


years of doing this I actually like that

I actually use and that's why we've


chosen to be affiliate partners with

them and as a little bit more incentive


for you if you decide to get life

insurance and kind of go through our


link to get to policy genius to do it I

would be happy to send you a copy of our


book completely for free so if that

interest you will have instructions down


in the description below so we can get

you all hooked up and if you're new to


our channel welcome so glad you're here

and what we do here is we talk about


practical ways to kind of put more money

in your pocket and to be wise with money


but then we also talk about some of the

timeless biblical principles and how to


manage our money wisely and so if that's

something that resonates with you you


can consider subscribing so you can hear

from us as we create more hopefully


awesome content that you will enjoy

alright that is all for today and I will


leave you with one last thought

regardless of how you do it just make


sure your family is insured make sure

that you have life insurance coverage


just in case you happen to meet Jesus a

little bit before you expect we want them taken care of.