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The Alemian File: How Much Life Insurance do I need?

By David Alemian

A question I’m often asked is, how much life insurance do I need?  To answer that question, we need to look at the purpose of life insurance.

The purpose of life insurance is to replace the financial loss that results from the death of the insured.  In other words, we need to replace the lost income of the breadwinner, and pay off any debts like final expenses, credit cards, auto loans, and the mortgage.  You must also consider future costs such as college for your children and retirement for your spouse.

In addition, you want to take into account resources, such as your spouse’s income, any investment income, and any life insurance that you already have.

The biggest mistake many people make is overlooking inflation when making their calculations.  The U.S. long-term inflation rate is 3.22%.  That might not seem like a big deal, until you realize that at that rate, the price of most things will double about every 20 years.  If you’re 40 years old today, most things will double in price by the time you reach at age 60.  However, we are living longer, so if you live to age 80, prices will double again and be four times that of today.

As you can see, it can be complicated because there are a lot of pieces to the puzzle and everyone’s needs are different.  So how can you make sure that you get it right?  Most people get it right by talking with a qualified, licensed life insurance agent.  You can also check out this easy to use Life Insurance Needs Calculator that I’ve put right here for you.  The great thing about the calculator is that it should give you a good idea about how much you need before you talk with a life insurance agent.  The agent can then quickly confirm your needs and help with your application right over the phone.

If you have questions, send an email to David@TheAlemianFile.com.  Help keep yourself informed on financial issues… checkout and Like “The Alemian File” on Facebook.


About David Alemian

Successfully creating affordable retirement plans guaranteed to last a lifetime is a unique, specialty skill. It’s a challenging arena but respected writer David Alemian makes it look easy. Alemian is a leading retirement expert and nationally recognized authority whose expertise is shared via video columns, numerous journals, and talk-shows.

His national recognition results from both revolutionizing and revitalizing how organizations and individuals like you and me plan and save for retirement. Alemian is considered “The Go-To Guy” for creating and implementing absolutely irresistible, lifetime retirement pension programs.

Formerly the host of “It’s About Money” Radio Show, Alemian has also produced and is featured in over 200 financial education videos. Additional content can be found in many well-respected, publications including: MD Magazine, Physician’s Money Digest, Physicians Practice, Journal of Clinical Oncology, Consultant Live, Psychiatric Times, Cancer Network, OB/GYN.net, and The Healthcare Executives Network.


This article reflects the thoughts and opinions of the author and is being provided for educational and informational purposes only. It should not be considered financial or tax advice. Please consult your financial or tax advisor about your situation.