Auto news on Youtube Feb 19 2019

If you're wondering how much life insurance you need we're going to talk

about that in this video and while it isn't a black and white answer in this video

I'm gonna give you some specific ways you can tell and figure out how much you

need I posted something to Facebook about life insurance and I got this

comment from a reader that is just kind of stuck with me

you know because I think the truth is that most of us haven't experienced

something like this but this is real life and unexpected stuff happens and it

would be wise of us to be ready for the unexpected now I do need to add that I'm

not a life insurance agent I'm an enthusiast I'm someone who's interested

in this stuff so definitely consult a professional if you feel uncomfortable

making any decisions and just view this content as educational and with all that

out of the way let's get to it

so the first in easiest way probably to tell how much life insurance you need is

to actually use a calculator and typically a calculator like this is

going to ask you a number of specific questions about your financial situation

to help you determine you know how much you actually need because this isn't a

one-size-fits-all answer and the calculator that I use for this is over

at Policy Genius and I went ahead and ran a sample scenario using this

calculator so you can kind of get a feel for how this calculator works now we are

affiliate partners with policy genius so if you do decide to use this and we'd

appreciate if you use our link because it'll help support the channel support

our mission of what we're trying to do I mean we'll have all those links up above

or down below in the description as well and so to give it at this calculator all

you need to do is just click on this page here and I will have a link up

above so you can get over there and then they have a big button to calculate

coverage you can just click on that and then it will get you started going

through this process so that is probably the easiest and quickest way to get the

most accurate estimate for how much life insurance you need now there are two

other fairly popular methods for kind of determining how much life insurance you

need so we'll go ahead and cover those now and one of them is called the 10x Rule

and basically the gist of this is that you take your annual salary and you

multiply it by ten and that's the amount of coverage that you need so if you make

$50,000 a year then you would want to get $500,000 of coverage and I view this

more as a general rule of thumb maybe like a more of a ballpark number to

consider because everybody's financial situation is so much different if you're

you know in your mid-30s and you have five kids and you have a wife who stays

at home and you have much savings like that's gonna look

a whole lot different than if your empty-nesters you know when you have a

big retirement savings and all your debt paid off like those are two very

different scenarios and while rule of thumb like this can give you a ballpark

to kind of consider and get started you probably should dive a little bit deeper

to get something a little bit more accurate for your specific situation and

that leads us to another popular method of determining how much life insurance

you need and that is The Dime Formula and in the case of this formula D.I.M.E.

stands for Debt Income Mortgage and Education and these are the four factors

to consider when determining how much life insurance you need and basically

this would work like this you would take all the debts that you have exclude your

mortgage but just focus on all your other debts and total them up and next

you would go look at your income and you would figure out what your annual income

is and hopefully you know that and they would multiply that by the number of

years that you think your family would need support without you being there and

then after that you would look at the mortgage and you would figure out how

much mortgage debt you have and they do would take that number and then finally

for the education component you would add up all of the estimated education

expenses for all of your kids and now you would take all four of those numbers

and add them up for one grand total and that is the amount of coverage that you

need and as you might be thinking even with a formula like that there is

there's definitely some gray area and there's some things that just aren't

really really clear and so that's the thing it's like it's just an estimate

but the bottom line is that it's a whole lot better to have some life insurance

than to have no life insurance so even if you're underinsured a little bit it's

just far better than not having any insurance at all alright so last week I

get a question from a reader asking this I'd like to get your take on someone who

doesn't have a lot of debt in a nice sum say for retirement in the need for life

insurance so question is basically this do you need life insurance if you're

debt-free and if you have a big retirement savings and I told her that

that's actually our situation pretty much as well and so we have all of our

debts paid off and we have a decent amount say for retirement but I have two

kids and a third on the way and I have wife who stays at home with them and so

I think it makes a good amount of sense for me to have insurance to kind of

cover my family now even if I wasn't the breadwinner in the family there are

still things to consider like funeral expenses because you would hate to have

to pull money out of your 401k or borrow equity from the house to cover the

funeral expenses and especially with life insurance particularly term insurance

being so cheap that it just it makes sense to get it if you can and so

the next question you probably have is what I had the first time I did this and

that is how do I get the cheapest policy I don't want to pay too much for it I

won't give the cheapest policy that's gonna get the job done and the answer is

that you need to shop around you need to look at different insurance carriers

because they're all different in depending on your actual situation

you're going to find a different rate and this is why Policy Genius has been

my go-to recommendation after all these years of looking at all these different

insurance sites because they do this so well they let you compare quotes from

dozens of insurance companies all on one page and then they could take care of

all the paperwork for you as well and then on top of that they have

noncommissioned agents who will answer your question so these guys are doing it

right and they really make it as simple as it possibly can be so like I said

before we are affiliate partners with them so you can support us by using the

links in the description up above down below to get over their website and just

in case you think that I am recommending them just because we're affiliated

partners the truth is is we could be affiliate partners with any of the life

insurance companies out there and this is actually the one from my years and

years of doing this I actually like that I actually use and that's why we've

chosen to be affiliate partners with them and as a little bit more incentive

for you if you decide to get life insurance and kind of go through our

link to get to policy genius to do it I would be happy to send you a copy of our

book completely for free so if that interest you will have instructions down

in the description below so we can get you all hooked up and if you're new to

our channel welcome so glad you're here and what we do here is we talk about

practical ways to kind of put more money in your pocket and to be wise with money

but then we also talk about some of the timeless biblical principles and how to

manage our money wisely and so if that's something that resonates with you you

can consider subscribing so you can hear from us as we create more hopefully

awesome content that you will enjoy alright that is all for today and I will

leave you with one last thought regardless of how you do it just make

sure your family is insured make sure that you have life insurance coverage

just in case you happen to meet Jesus a little bit before you expect we want them taken care of

so that's all for today have a great rest of your day and I'll see you soon