Determining the Amount of Florida Life Insurance You Need

There are industry standards that agents use to determine the amount of Florida life insurance an individual needs. The amount you will need depends on your individual circumstances, as well. Here, we’ll take a look at the ways to determine the amount of life insurance you need.

The Usual Rule

Most Florida life insurance agents tell their clients that they should purchase a policy that is valued at between five and 10 times the amount of their annual salaries. This means that an individual who earns $50,000 per year will need to take out a policy that is worth between $250,000 and $500,000. Of course, it is important to consider that your circumstances may be different. If you are young and single with very little debt, you may not need this much coverage. Conversely, if you have a large, young family or a significant amount of debt, then you may need more coverage than this; your family may depend on your income for many years to come.

Analyzing the Situation

Determining the right amount of life insurance for you requires a very careful analysis of your personal situation. First, you should consider the amount of debt you have accumulated. Upon your death, all of these debts will need to be repaid. If you are single, this may be the only burden you need to consider. You will also need to consider the size of your family and whether or not your spouse will be able to support your family after a certain period of time. These two things together will help you determine whether or not you need a lot of Florida life insurance, a moderately-valued policy, or just a small policy to cover your debts.

Determining Actual Coverage Amounts

After these factors have been considered, the next thing that agents and their clients will need to do is figure out how many years that the insured’s income will need to be replaced and the percentage of the income that will need to be replaced. Then, it is also very important to allow some leeway for things like inflation and interest income, as well. By taking the total derived in this manner and subtracting your current savings, you can determine the amount of Florida life insurance you will need.

Life Insurance is Affordable

Even if you determine that you need much more life insurance than you originally thought, all is not lost. Thankfully, life insurance rates have gone down significantly over the last decade. As an example, a healthy 40-year-old man who is otherwise healthy would have paid upward of $1000 per year for a half-million dollar life insurance policy with a 20-year term 10 years ago. However, these days, life insurance is not nearly as expensive. Today, the same individual can purchase the same policy for less than $400 annually.  

You should speak directly with a Florida life insurance agent to determine the exact amount of coverage you will need. You will be asked questions about your personal health, your family, your debts and other factors. Then, you will likely be asked to participate in a physical examination in order to gauge your overall level of health.