# Calculating How Much Life Insurance You Need

### by Paige Estigarribia

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Calculating how much life insurance you need at a particular age can be a challenging task. One way to get a good idea of how much you should have is to use a life insurance calculator. Bankrate has a life insurance calculator specifically designed to give you a general idea of how much life insurance you should have, based on your personal circumstances.

Step 1: Determine how much burial expenses you will need

According to the calculator, burial expenses range from \$8,000 to \$10,000 dollars. So make sure to think about how much you'd like to leave surviving family members so that they can pay for your burial expenses. Once you have this number determined, put the amount in the box, and click next.

Step 2: Determine how many years into the future you will need to consider replacing income

For this question, you'll want to think about how many years into the future you will be replacing your income. Are you only interested in replacing income until your kids graduate high school? Or until your spouse reaches retirement age? Once you are finished, put the number of years in the blank and click next.

Step 3: Determine how much annual income your family needs

When thinking about these numbers, try and think about your typically monthly expenses - groceries, gas, bills. And then tally those expenses up into an annual estimation. Also make sure to consider school or education costs, or possible child care costs. Once you've come up with this calculation, put in your number and click next.

Step 4: Determine if you have children that may want to go to college

For this question, simply click either yes or no, if you have children who may want to go to college. Then click next. This question will also determine how the future questions are asked. If you answered yes, then proceed to Step 5. If you answered no, proceed to Step 8.

Step 5: Put in the number of children that may go to college

In this section, put in the number of children that may go to college. Then click next.

Step 6: Figure up the estimated expenses needed for college, per child

Try and do an estimate of how much you might need to pay for college expenses per child. The website FinAid.org has some great tools available to help with estimating college expenses. Once you have a good estimate, put this number in, and then click next.

Step 7: Put in the ages of your children

Put in the ages of each of your children, and then click next.

Step 8: Determine if there are any one-time expenses that you want to fund

Think about whether there are any one time expenses that you want to fund, and if so, then click yes, and next. If not, click no, and then proceed to Step 11.

Step 9: Put in the amount that you intend to spend to fund the one-time expense

Put the amount in that you plan to spend on the expense, and then click next.

Step 10: Determine how many years from now the expense will occur

Think about this upcoming expense, and estimate how many years away the expense will occur. Put in the number of years, and click next.

Step 11: Calculate how much in liquid or semi-liquid investments you have

Calculate how much you have available in liquid or semi-liquid investments. As you are making these calculations, don't include any money that you have in 401k or IRA retirement accounts. Once you have determined this amount, type it in, and click next.

After you go through this process, the life insurance calculator will give you an estimated amount of life insurance that you might consider. You can click the details button, after you get your estimate, to get additional details on how the calculator arrived at that number. Using a life insurance calculator can be a very handy way to calculate a general estimate of how much life insurance you need.

Paige Estigarribia is a writer for The Dollar Stretcher who enjoys writing about food, frugal living, and money-saving tips. Visit Paige on Google+.

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