Life Insurance may have been brought up to you at work or by your spouse, parents, grandparents or even a friend who is offering it to you.
The reality is there are 2 main ways to calculate how much life insurance you should have.
This method pays off all of your outstanding debts (liabilities) upon your passing so that your heirs are debt free
This method calculates how much income your heirs will miss out on if you passed away tomorrow. You can quickly calculate this by multiplying your current annual income X however many years your heirs will financially depend on you.
**Inflation and pay raises are not factored into this income replacement equation for ease of calculation
Many financial representatives and advisors may even recommend combining both methods
Hope this was helpful in calculating how much life insurance you should have!
See you soon,
DISCLAIMER: THIS IS NOT FINANCIAL ADVISE. THESE ARE ONLY OPINIONS.
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