Determining How Much Life Insurance You Need
The goal of a life insurance policy is to have enough resources to enable the survivors to maintain the current status of living, pay off all the final expenses, and to pay for the cost of four years of college at the stae university, currently costing $30,000 per student ($7,500 a year).
Stocks, bonds or other liquid assets can be used at death to meet financial obligations and reduce the amount of life insurance needed.
I don't recommend using retirement money to offset your life insurance needs because the survivor will still need those funds at retirement.
You never know what unexpected surprises lie ahead for your survivors so it's good planning to err a little on the high side of what you think they will need.
