Quick Way to Calculate How Much Life Insurance You Need

Carl Richards in The New York Times shows a quick way to calculate how much life insurance you need by following the 20-20 plan: “First, you have to decide how much life insurance to buy. This is where most people get stuck. You’re not going to get stuck. Just take your income and multiple it by 20. For example, let’s say your income is $50,000. Take $50,000 times 20 and you get $1 million. This is the amount of life insurance coverage you’ll buy. This goes a long way toward replacing the economic loss that will result if you’re no longer around.” Then buy a 20-year term policy for that amount. (nytimes.com)