If you know about the benefits of life insurance in Memphis, TN and want to get a policy, then the next step is determining how much coverage you need. An agent at Keltner Insurance can also help you determine how much coverage is best for your situation.
Calculate Your Immediate Obligations after Death: This will take into account final expenses, such as medical bills, funeral costs, debts, the balance of the mortgage, and college costs.
Future Income Needed to Sustain a Household: Calculate the present value of the cash flow streams and come up with a number your family will need after death. Stay at home parents should calculate the cost it would take to replace services, such as childcare. Once you have these two numbers, you can subtract any liquid assets you have and get a rough estimate at how much life insurance to purchase.
There are some outdated rules out there that can be good places to start if you are feeling overwhelmed with getting life insurance. Some suggest to multiply your income by 10. This rule doesn’t take a look at detailed family needs or take into account any current savings accounts. It’s also not useful for determining how much life insurance a stay at home parent should have. The DIME formula (debt, income, mortgage, education) can be more useful, since it will take a look at your family’s expenses. It’s more comprehensive, but it still doesn’t account for any other life insurance coverage you may have, as well as savings accounts. It also doesn’t consider the unpaid contributions for stay at home parents. Always get a little more coverage than you think you need, instead of skimping. A cushion will help your family members maintain their lifestyle.
Contact Keltner Insurance, serving Memphis, TN, to get a quote on life insurance.