Adler Insurance strives to help Prescott residents determine if you have enough life insurance

It is never exact, but there are ways to make sure your loved ones are financially able to cope if something should happen to you, especially unexpectedly. Adler Insurance wants to help Prescott residents determine if you are adequately covered with the right amount of life insurance.

Again, this will not be an exact amount, but a good place to start is by calculating your long-term financial obligations and then subtracting assets. The number that you come up with is the “gap” that you will want your life insurance to fill. There are several formulas you can use to help you arrive at the right numbers. Here are a few:

The outdated rule
One rule, that many believe to be outdated, is the “income multiplied by 10 rule”. This does not take into account inflation, interest and one very important factor: the stay-at-home spouse/parent. Both parents should have a policy, even if one does not work. Should something happen to the stay-at-home parent, there will be hidden income costs that the “income multiplied by 10” will not cover. If you are going to use this calculation method, be sure to keep these things in mind.

Ten times your income, plus $100,000 per child for education
Thinking about education is important when coming up with the right amount to purchase. This is a good start, but do not forget to really study the “income multiplied by 10” to make sure you are taking into account everything.

DIME
This formula is probably a better way to go than the two previously mentioned. Why? DIME considers the following: debt, income, mortgage and education. All need to be considered when coming up with the right amount of life insurance.

• Debt: Make sure this is debt other than the mortgage. And don’t forget to add estimated funeral expenses.

• Income: How many years will you need this income? Perhaps sitting down with a professional will help you arrive at that figure.

• Mortgage: What is the amount needed to pay off the mortgage?

• Education: There are formulas you can use to determine the costs associated with education.

Once you determine which formula to use, you will then want to subtract your assets from that number.

Planning for the future is very important. It is also important to make sure you do not miscalculate when seeing to it that your loved ones will be taken care of. This planning should not be done in isolation. Let the experts at Adler Insurance, your life insurance experts in Prescott, look at your current life insurance policy(s) to make sure you are adequately covered. Call us today at 928-710-1455 and learn more about other types of insurance services we offer at http://www.adlerlifehealth.com.

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