You probably won’t see it on your calendar, but September is Life Insurance Awareness Month. And it is indeed important to be aware of the importance of life insurance. Are you adequately insured?
Many people aren’t. About 40% of Americans face some type of life insurance gap, either because they’re uninsured or underinsured, according to a 2021 survey by the research and advocacy groups LIMRA and Life Happens. The need for life insurance is pretty straightforward: If something were to happen to you, would your family be able to continue their same lifestyle? Would the mortgage still be paid? Would your children still be able to further their education?
So, if you decide that you should acquire or strengthen your life insurance, how much do you need? Your employer may provide you with some insurance as an employee benefit, but it may not be sufficient. You might have heard that you should have coverage worth seven or eight times your annual salary. But this estimate is just that — an estimate. Everyone’s situation is different, and there’s really no one formula that can tell you how much insurance you require. To determine the coverage you need, you’ll want to consider several factors, including your age, number of dependents, your income and that of your spouse and the size of your mortgage.
