Life insurance is rarely a topic that consumers like to think about, talk about—or even do anything about for that matter. Recent statistics show ownership of life insurance policies is at the lowest level in decades: One in four consumers have no life insurance at all. One of the biggest problems is many consumers simply have no idea how much life insurance they need or the best place to get it.
So, who needs insurance?
Simply put: If you have anyone in your life who depends on you financially, you need life insurance. While many Americans get life insurance policies through their job, the coverage is usually lower than individual policies and is only in place while they're employed. Fewer than half of Americans between the ages of 25 and 64 with annual household incomes between $35,000 and $100,000 have their own life insurance policies, according to new data released by the insurance industry group LIMRA. In its survey, most consumers said they were not financially prepared for the death of a family member and would need to make a drastic or significant financial change if that occurred.
So how much insurance is enough? Some experts say you should have enough life insurance to cover five to 10 times your annual income (especially if you have a young family), but often that's just a guess. The answer really depends on how much money your family and/or dependents will need after you're gone.