Frequently Asked Questions
How much life insurance do I need?
In determining how much life insurance you need, you must consider the three phases of your financial life, the creation phase, the preservation phase, and the conservation phase. You spend the first 30-40 of your working years creating your estate and the next 20 years during your retirement preserving your estate. In the final analysis at death, your goal should be to conserve your estate from the IRS and various other unplanned happenings that can greatly erode a large portion of an estate that you worked a lifetime to create. During the child rearing years of your creation phase, both you and your working spouse should have 10-12 times your annual income in life insurance. During the second half of your creation phase, you and your spouse should each have 5-6 times your annual income in life insurance until retirement. Assuming that you have built a nice retirement nest egg for you and your spouse, you should then maintain a minimum of 15% of your gross estate in whole life or lapse protection universal life insurance for your retirement and preservation phase. A portion of the life insurance that you purchased for the long term to create your estate will be the same life insurance that you own at your death to conserve your estate.
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