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Do You Have Enough Life Insurance?

If something happened to you, would your loved ones be in a tough spot without your income? It may be difficult to consider that scenario, but life insurance is a way to help ensure your family will stay financially afloat after you’re gone.

If you purchased life insurance years ago (perhaps before you had a house and children) it may be time to bump up your coverage. Your employer may offer a plan, but everyone’s needs are different. Below are a few questions to help put you on the right track.

How old are your kids?

The younger your children, the more coverage you’ll want. If you have toddlers, your life insurance needs will probably differ from someone with teenagers. If you die and leave your spouse with a 1-year-old and 3-year-old, he or she has nearly two decades to get through without your income — not to mention the cost of college. Life insurance can help make that time easier financially.

Has your income changed?

The general rule of thumb is that you should invest in 7 to 10 times your income in life insurance.1 If you first bought life insurance 10 years ago, you probably weren’t earning the salary you are today, therefore, you have more you need to protect for your family if something were to happen to you.

What do you still owe?

List the expenses in your life that are ongoing — mortgage, car payments, and any big credit card balances or private student loans. Debt doesn’t disappear when you die, and your spouse will have less income to make payments with.

Some debt, such as credit card debt, may be forgiven if the estate doesn’t have enough in assets to pay the balance — but if a spouse was a joint account holder, they’ll be liable. Having enough life insurance to pay off any major debts, or at least to make it easier for your spouse to continue making payments is something to consider when reassessing your life insurance needs.

Do you plan to cover college expenses?

If your children are likely to attend college, that’s a massive future expense. In addition to buying coverage at a multiple of your income, you may want to add extra for anticipated college costs. Consider bumping up your life insurance by $100,000 for each child’s college fund.

What about funeral expenses?

The typical funeral costs between $7,000 to $10,000, which is a big bill to cover if an income-earner has just died.2 If you factored this into your original total, that’s fine. If you didn’t, you may want to consider increasing your coverage amount as needed.

What you can do next.

Visit the Life Insurance Needs Estimator, available on the new financial wellness portal for members of the State Bar of Texas. This tool takes all of the above information into account and helps determine a coverage amount best suited to your needs.

The Texas Bar Private Insurance Exchange offers affordable term life insurance as a valuable benefit of your membership. If you are interested in learning more about this product, please feel free to contact us with any questions you may have. Our team of benefits counselors is standing by to help guide you to a plan that best suits your unique needs.


1 CNN Money, How big should my life insurance policy be?, 2018, https://money.cnn.com/How_Big_Life_Insurance
2 National Funeral Directors Association, NFDA News Releases, December 19, 2019, https://www.nfda.org/GeneralPriceList2019
Group Insurance coverages are issued by The Prudential Insurance Company of America, a Prudential Financial company, Newark, NJ.
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