You can have too much life insurance, but it is also a mistake to not have enough. There is a fine balance to the amount of life insurance you need.
How do you know when enough is enough? It is simple to figure out what it costs to bury someone, but that is not all that life insurance is meant to be. Life insurance is also meant to take the place of your income when you are gone so that your surviving spouse and dependents can maintain a basic lifestyle. One thing to remember is that life insurance is not meant to be a savings plan. That was already covered under savings plans and retirement programs. A simple calculator for determining the correct amount of life insurance can be found here and the Wall Street Journal has a spreadsheet you can download here.
Well, we are getting to the end of common personal financial mistakes. Go on to Part 9, Don’t Put Your Eggs All in One Basket.
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