I just got married, how much life insurance should I buy? - Kevin in Phoenixville.


Congrats. Like auto insurance coverage, it is sometimes difficult to see the true value of life insurance coverage until you actually need it.

In the meantime, the only way you will feel comfortable with your life insurance policy is if you understand, and agree with, the reasons you bought it in the first place.

There are many reasons for an individual to own life insurance coverage.

Perhaps the most compelling reason is to purchase a death benefit which will provide for the financial needs of their survivors.

Determining how much life insurance coverage you need is a four-step process:

1) Determine total short-term needs in the event of your untimely death

2) Determine total long-term needs in the event of your untimely death

3) Determine total resources available to family members

4) Provide insurance coverage for any remaining shortfall

Short-term needs are financial obligations and/or expenses arising within six months of death. Examples of short-term needs include expenses you pay now such as:

loan balances (automobile loans, etc)

outstanding credit balances (credit cards, revolving lines of credit, etc)

mortgages (first mortgage, second mortgage, equity loans)

Add to these current expenses any death-related expenses which must be paid in the short term:

funeral expenses

final medical costs

estate settlement costs

estate taxes due

charitable bequests you would like to make at death

And if you don't already have one, your survivors should be left with a liquid emergency fund sufficient to get them through any unexpected financial needs, perhaps six months worth of living expenses.

Factors To Consider When Selecting Life Insurance

In an ideal world, we would each carry sufficient life insurance to continue to provide a lifestyle for our survivors similar to what they enjoy now, with us here. We cannot always afford to fully cover our survivor needs, particularly in our early years. However, life insurance comes in many shapes and sizes. By carefully considering the type and amount of life insurance that best meets your needs you can ensure that you have provided for your family's monetary needs, even if you are not here to do the providing.

If you would like more information or would like to ask a question please contact Frederick Hubler at or call 610-560-2003. Frederick Hubler is an award winning financial advisor and runs Creative Capital Solutions, a private wealth management firm. Securities offered through Capital Analysts Incorporated Member NASD; SIPC

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