10 Money-saving Tips That Don’t Work

You Need Life Insurance Equal to Seven Times Your Annual Salary

You Need Life Insurance Equal to Seven Times Your Annual SalaryThere’s a lot wrong with this statement, according to Deglow. First and foremost, he notes, not everyone needs life insurance. ‘If there isn’t anyone who would become financially compromised should you pass prematurely and you have enough assets to pay off your liabilities, life insurance may not be a necessity,’ he explains. However, if you do have a spouse and/or children, you need to crunch the numbers to fully understand how much you’re setting aside. As an example, John Deglow, CFP, AIF, at Unified Trust Company, explains someone who brings in $100K a year and opts for a $700K life insurance benefit, might be shortchanging their family. ‘Withdrawing 4 percent of $700,000 would provide only $28,000 annually for your family. A more aggressive withdrawal rate of 6 percent provides $42,000, again much less than the family was accustomed to,’ he shares. And to make it more complicated, he notes this doesn’t address other liabilities, such as mortgages, credit cards, student loans, and more. His advice? Your life insurance should be as much as 20 times more than your income. Learn how to save money on homeowners and car insurance without doing much more than lifting a finger.