How much life insurance should I have if I make $50,000 a year?

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Key points

• It’s a good idea to ensure you have enough coverage to replace your paycheck at least 10 times.
• You may want to pad that total to allow for things like paying off debts and final expenses.
• Be wary of buying excessive coverage, as premium costs may be too high to meet other financial goals.

If you have people in your life who depend on you financially, then it’s really important to buy life insurance. This way, if you were to die, they would get a head start that could potentially help them pay their bills without financial stress.

The amount of life insurance you need will depend on several factors. And your income is one of them. In fact, it’s fair to say that someone earning a higher salary needs more life insurance than someone earning a lower salary. And so if someone makes an annual salary of $50,000, it’s probably best for him to buy at least $500,000 worth of life insurance, and maybe even more.

Make sure you have enough coverage

As a general rule, it’s a good idea to buy enough life insurance to cover at least 10 times your salary. Dave Ramseyfor example, say that a policy worth 10 to 12 times your annual income is a good bet.

But you may want your life insurance policy to do more than replace a decade of earnings or something like that. You may also want to ensure sufficient coverage a pay off existing debts share with someone else.

Let’s say you are married and have $150,000 mortgage loan. If you were to die, your spouse may find it difficult to cover that mortgage, especially if he or she is not working at the moment because he is caring for your young children full-time. So in that case, if you make $50,000 a year, you might want to aim for a $650,000 life insurance policy. That way, you get $500,000 to cover 10 years of replacement income, and you also get enough money to pay off your home in full.

You may also want your life insurance policy to include a cash amount to cover final expenses. The average funeral costs between $7,000 and $12,000, according to Lincoln Heritage. Adding that amount to your life insurance could save your loved ones the stress of having to cover yet another expense.

Choose your insurance benefit wisely

Buying life insurance that is too low could leave loved ones in trouble should you die untimely. But buying too much life insurance can also be problematic.

If you secure more coverage than you really need, you may end up finding it difficult to cover premium costs. And if you fail to pay your premiums, your coverage could lapse.

Therefore, if you make $50,000 a year, it’s absolutely a good idea to aim for a minimum coverage of $500,000. And you can add to that total based on your existing debts and needs.

But do you need $1.2 million? life insurance policy when is your family used to living on $50,000 a year? Probably not. And if you push yourself to buy extra life insurance, you could end up falling behind not only on your premiums, but other bills as well. You may also find it difficult to increase your savings — retirement and otherwise, so it’s really important not to overdo it.

Our picks for the best life insurance companies

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