In Part 1 of this series, I explained why people need life insurance; in Part 2, I explained the basics of “how insurance works.” A question that people always have is, “how much life insurance should I buy?” There are various guidelines for estimating how much life insurance one should buy. Alas, they usually lead to the wrong answer.
Life insurance is unique among insurance products. With most forms of insurance, you insure against a specific financial loss – the cost of a demolished automobile or a burned-out building. Although no amount of money can compensate for the loss …Read More