The Gerber Life Parenting Blog

Do I Need Life Insurance? If so, How Much?

November 19, 2014

cute baby asking a questionLife insurance provides security and greater peace of mind to you and your family, helping to ensure that your family is taken care of should the unexpected happen. Before you estimate how much life insurance you may need, you need to determine why you are interested in life insurance and whether or not life insurance is the right kind of protection for you and your loved ones.

You can ask yourself the following questions to help determine if life insurance may be right for you:

  1. Do I have children who are financially dependent upon my income? If so, do I want life insurance to provide protection for my children?
  1. Do I have a spouse or others who are financially dependent upon my income?
  1. Do I want my income to be replaced in some way if I should die, in order to safeguard my family from sudden loss of my income?
  1. Do I want to leave a charitable gift?
  1. Will my loved ones have enough money to cover the cost of my funeral, my debt(s), or other expenses that they would be left financially responsible for covering, should I die?

If you answered yes to at least one of the above questions, then life insurance may be a good financial decision for you. You now need to determine how much life insurance you may need, how much you can afford, and which kind of life insurance policy would work best for you, based on your needs.


Yes, I need life insurance – now what?

The first step in determining how much life insurance coverage you may need is to estimate how much money your dependents may need to be better secure financially, should something happen to you.

Start by asking yourself the following questions:

  1. How much money will my loved ones need in order to replace my income and to cover their basic living expenses, such as existing and ongoing bills, and necessities such as food, water, shelter, clothing, and transportation?
  1. How much money will my loved ones need for covering extra expenses such as funeral costs, medical costs, or a child’s school tuition?
  1. For how many more years would I like to financially provide for my family if I suddenly were to die? Do I want to provide for my family until my children are expected to graduate high school, or the number of years until I plan on retiring?
  1. What is my current age and income?
  1. How much can I afford to set aside each month to cover the insurance premiums?
  1. When do I want the policy to mature, in a certain number of years, or after a great many years to come?
  1. How much do I expect it would cost to pay for the following expenses, should I die?
    • Funeral expenses (in 2012, the median cost for a funeral was $7,045, according to the National Funeral Directors Association)
    • Debts, including car loan payments and home mortgage
    • Projected future medical costs, school or college tuition, and any other many expenses, adjusted for inflation
  1. What other money or assets that I have, if any, would go to my dependents?
    Examples include:
    • Amount in your savings accounts
    • Amount in your financial investments
    • Your vehicle
    • Your home
    • Amount of money gained annually after your children leave home because of your reduced household expenses
    • If applicable to your situation, your spouse’s annual income if it affects how much insurance coverage your family might need
    • If applicable to your situation, any Social Security benefits and/or retirement savings and/or pensions, calculated on an annual basis

Once you’ve determined how much life insurance you would like, and have purchased an appropriate policy, it’s a good idea to periodically re-evaluate your calculations and your coverage amount, to make sure that the coverage amount can still properly protect your family.

get a free quote

If you would like help determining how much life insurance you may need or can afford, or would like to apply for a life insurance policy, you can use our free virtual agent tool, which walks you through similar questions about your life insurance needs.

You may also email Gerber Life Insurance Company or call our friendly representatives at 1-800-704-2180. There’s no cost or obligation to apply for life insurance, and you’ll have 30 days to review your policy to decide if you want to keep it.

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