When purchasing life insurance it is important to determine how much life insurance coverage is needed. There are many reasons why people choose to buy a life insurance policy, the following are the most popualr reasons: to cover funeral costs, to setlle debts and obligations, and to protect the financial stability of their family. High premium policies are also purchased for business life insurance needs. Many business owners purchase a life insurance policy on themselves or on the lives of their business partners or key man employee. Proceeds can be used to"buy out" the spouse of deceased in the event of a partnership.
Once you have made the decison to purchase life insurance, you should assess your own personal situation and determine the face amount (or death benefit) of policy that is right for you. For instance, if you are supporting children in college, you should know how much you still owe toward the school, as well as how much money it will take to support the child financially while they are in school. Add that amount to the total of any debt and outstanding loans (such as your mortage) you may have, as well as the average cost of a funeral and you will have the minimum face amount you will need to purchase. Aside from covering your financial obligations, many people want to leave money to their family that will assist them in maintaining their life styles.
It is hard enough loosing loved ones, on top of that to have the financial burden once they have passed. You should know before purchaing affordable life insurance how much face amount you will require. $100,000, $150,000, $250, 000, $500,000, $1,000,000 and $1,000,000+ are the most popular amounts of life insurance purchased in the US. Those amount are purchased through either a 10, 20 year term life insurance, or 30 year term duration.