Reader’s Question:

At home in San Antonio Texas TX my wife and I discuss the future every now and then, and one time she suggested that I buy a $100,000 life insurance policy. Why $100,000 and not $75,000 or maybe $250,000, or even a million? I ask you now, how much life insurance should I buy?

Arthur

San Antonio, TX

Arthur, I find your question very interesting. I guess it’s one that thousands of other family men ask in San Antonio Texas TX and across the US.

To answer it, a good starting point would be to ask another question. What’s your purpose for buying life insurance? For the sake of illustration, let’s just say you buy insurance to replace your current income in case you meet untimely death tomorrow. And let’s assume that you’re now 35 years old, earning $3,000 a month, or $36,000 a year, and you plan to retire at age 60 in San Antonio Texas TX. Let’s assume further that your income will stay the same year after year until retirement.

A simplistic approach in computing how much life insurance you need is this: The number of years between now and retirement is 25. The replacement income you should provide is the result of multiplying your annual income of $36,000 by 25, which is $900,000.

For a more thorough life insurance planning, I suggest that you see a life insurance agent in San Antonio Texas TX. If you’re curious how much a $900,000 life insurance policy would cost you, fill in the form provided on this page.

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