{"id":1330,"date":"2021-06-20T15:10:06","date_gmt":"2021-06-20T15:10:06","guid":{"rendered":"https:\/\/ladderlife.com/blog\/?p=1330"},"modified":"2021-06-20T15:14:19","modified_gmt":"2021-06-20T15:14:19","slug":"how-much-life-insurance-do-dads-need-breaking-down-the-common-question","status":"publish","type":"post","link":"https:\/\/ladderlife.com/blog\/2021\/06\/20\/how-much-life-insurance-do-dads-need-breaking-down-the-common-question\/","title":{"rendered":"How much life insurance do dads need? Breaking down the common question."},"content":{"rendered":"\n

Happy Father’s Day!<\/strong><\/p>\n\n\n\n

Life Insurance is high on the list of priorities for dads. That’s because there are few things, if any, more important to dads than the security of their families. At Ladder, 78% of our male policyholders are dads. So as a father or expecting father, you\u2019re probably also thinking of all the ways to make sure your loved ones are taken care of. From baby-proofing the house to setting up a college savings account, the list is far and wide.<\/p>\n\n\n\n

If you\u2019re like most dads, life insurance is probably also on your list. And, like most dads, you\u2019re probably wondering: How much life insurance do I need?<\/p>\n\n\n\n

Finding the Coverage that\u2019s Right for You and Your Family<\/strong><\/p>\n\n\n\n

How much you should buy really depends on your goals and budget. In the end it\u2019s all about figuring out how much risk you can afford to take off the table. You\u2019ll find a lot of calculation methods around the internet to help you figure out how much life insurance you need \u2014 you can even use Ladder<\/a>\u2019s free life insurance calculator<\/a> to get you started.<\/p>\n\n\n\n

Want to get deeper into the numbers? Here\u2019s a method for picking your term and coverage amount, based on the simple but powerful idea of replacing your income.<\/p>\n\n\n\n

Picking your term<\/strong><\/p>\n\n\n\n

How many years until you think you\u2019ll retire? That\u2019s your term. The reason why is that until then, you\u2019ll most likely have people counting on your income (for example your spouse\/partner and\/or kids).<\/p>\n\n\n\n

Picking your coverage<\/strong><\/p>\n\n\n\n

Pick a coverage amount that\u2019s equal to your annual salary multiplied by your term. So for example, if you make $100,000 a year and have 10 years left until retirement, pick a coverage amount of $1M. If you have 20 years left until retirement, pick a coverage of $100,000 x 20 = $2M.<\/p>\n\n\n\n

It may sound like magic, but the multiple is an annuity factor that takes into account average expected future salary inflation and investment returns. Calculating your coverage this way should enable your beneficiaries to invest the life insurance payout (for example, in a mutual fund) and maintain their standard of living by recouping your lost income each year through investment returns. Of course that all depends on market conditions.<\/p>\n\n\n\n

To make things even simpler, most experts recommend coverage of a minimum of 10x your annual salary. So if you don\u2019t have the bandwidth right now, simply get your 10x in place, and figure out the rest later. Ladder\u2019s flexible coverage<\/a> allows you to automatically decrease and apply to increase your coverage with a few taps in the app or clicks of the mouse.<\/p>\n\n\n\n

If you\u2019d rather think through your goals in more detail, here are 3 steps to follow<\/strong>:<\/p>\n\n\n\n

1. Start by clarifying your goals<\/strong><\/p>\n\n\n\n

Why do you want to buy life insurance? Or asked another way, what are you worried will happen (or not happen) if you were to die in the next 10, 20 or 30 years?<\/p>\n\n\n\n

Write down your answers, and for each of them figure out if money would help mitigate your concern. If so, there\u2019s your life insurance goal. Here\u2019s a list of goals we commonly hear:<\/p>\n\n\n\n

I want my family to:<\/p>\n\n\n\n