“The most common mistake I see is when people assume that the policy at work is sufficient,” said Matt Cosgriff, a certified financial planner at BerganKDV in Minneapolis. “They’re often two times your income.”
That’s far less than what’s needed: Generally it should be an amount that’s equal to 10 times your income, he said.
Most people don’t consider life insurance. If you have kids and you want them to enjoy the same comforts that you afford them now, you might want to consider life insurance. Here’s what most insurers believe to be adequate:
- Seven out of 10 millennial parents have less than $250,000 in life insurance.
- Child care costs can run upward of $10,000 a year.
- One rule of thumb: Your coverage should be 10 times your salary.