Most people recognize that they require life insurance, whether it will be for their short-term liabilities, mortgage debt, final expenses, etc.  However, the question that frequently comes up is "How much life insurance do I actually need?" 

This is actually a very important question. Without sufficient coverage, your loved ones are left dealing with the financial burdens of maintaining the lifestyle they're accustomed to, but with one less income earner.  On the other hand, it is entirely possible to over-insure yourself.  With too much coverage, you end up paying too much in premiums over the course of your life and you may end up worth more dead than alive.

So, how much insurance is enough?  Everyone has unique needs when it comes to insurance.  Some might want to leave more to their surviving spouse and kids.  Others want to leave just enough to pay off the mortgage and credit cards.  In some cases, it's simply a function of what your budget can afford.

As a tool to help solve your insurance puzzle, many insurers have created 'insurance calculators'. Here is an example of one from Transamerica Life, which we have found to be a helpful tool http://www.aegoncanada.com/Video/Life/en/Transamerica_LifeScripter.swf.

By inputting your personal data into the calculator, you will get a good idea of what your insurance needs are. However, insurance calculators on their own are simply a good tool to start the process of assessing insurance needs and should not be used on their own.  The next part of that process should be to meet with your insurance advisor who can help explain what the calculator is telling you and finalize what types of coverage you need. 

If you'd like to go through the insurance calculator and/or talk to us about your insurance needs, please contact us anytime.