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It’s easy to put off buying life insurance. No one wants to think about death, and the mortality tables indicate the odds are with those who decline to purchase it. However, as any insurance agent can attest, lack of life insurance has devastating consequences for survivors.

Imagine a two-income family with young children: one parent’s income can’t come close to paying the bills and raising the kids. The family home would need to be sold. Savings would be depleted. Just paying for funeral costs alone can wipe out all the cash the family has on hand.

Term life insurance is a necessity. Because the insured are more than likely to outlive the term, it is relatively cheap. The price differs enormously from permanent life insurance because an eventual payout is expected with permanent insurance. Term policies, on the other hand, have a 99-percent chance of never resulting in a claim, so consumers can purchase a lot of coverage for very little cost. Many will also allow the policyholder to convert a portion of it to permanent life insurance prior to expiration.

How much term insurance coverage should you have?

The very nature of term life insurance makes this very easy to figure out, as explained by Protective Life Corporation. Term lengths generally range from 10 to 30 years. Because of this, the natural first question is how long the policyholder needs the coverage. Those just starting a family falls into the 30-year category. People without children or who are near retirement may require a shorter term. Whatever the case, the key is to determine how long the family plans to maintain the current lifestyle before retirement. It is also important to consider college and retirement savings needs as well.

Once the term has been decided, the next step is multiplying it by the present income of the insured. For example, if the insured makes $50,000 per year and needs a 30-year term, the total income replacement needed equals $1.5 million. Since life insurance is tax-free, this figure can be reduced to $1 million. The calculation can then subtract any savings and investments. For example, if the family has $250,000 in retirement savings, the amount needed would reduce to $750,000.

Life insurance provides crucial benefits for families. Without it, the future of the survivors remains in jeopardy. By obtaining proper coverage, it’s possible to ensure the family’s long-term future in the event of a breadwinner’s untimely passing.