How much of my family income should I spend on life insurance? ｜Family Financial Ledger Guide - American Life Insurance Guide©️

For some families who prefer life insurance, we often ask ourselves a question,Have I bought too much life insurance?Or, am I not buying enough life insurance?How much money should I put into my life insurance account in a year to be more reasonable?

There is no simple answer to this question.Different family income status, different life stages, we are faced with different choices.But according to the data summarized by a large number of financial planning cases using life insurance, we can get some references from it.

Take the ratio of household income as the baseline

Buy life insurance,If the investment is insufficient,Then you can't fully enjoy the characteristic potential brought by American insurance products, and can't even provide enough protection for families and relatives;

If you invest too much,Then the monthly insurance premiums will also put financial pressure on the family and affect the existing quality of life.

So how much money should we invest in purchasing life insurance?

My suggestion is that no matter how many life insurance policies you have, whether it is for financial management or pure protection,Your monthly expenses on all life insurance policies should avoid more than 28% of the family's total income before tax.

For example, if I am 40 years old, male, and my family’s total annual income before taxes is $25, then the recommended maximum amount that the family can use to pay or save life insurance premiums each year is:

$250,000 X 28% = $70,000

$7 USD,It is my family (including all members), the comprehensive recommended upper limit of the annual premium of all life insurance policies.Evenly allocated to 12 months, then what I can afford each monthThe total family premium is capped at $5833.

If assigned to a family of 3, since minor children are usually allowed to deposit up to $1 in premiums each year, the two parents can each deposit $3 in premiums each year.

Separated planning of protection insurance and wealth management insurance is better

"Fish and bear's paw cannot have both."Security and financial management are two extremes. Under the cost factor, the two are completely packaged together. Except for advertising and marketing that sound very good, the actual result is that both sides account for a little bit, but both sides are not strong. Will make many policyholders fall intoMisunderstandings of buying American insurance.

Therefore, for high-income families, a common practice is,Will guarantee andInvestment and financial managementSeparate insurance requirements,Designing and insuring separately can help us achieve the goal of maximizing benefits.

Generally speaking, the role of the family’s main source of income will first be insured purely for"Comprehensive Protection" Insurance.Use a matching guaranteed premium payment strategy to control the outflow of family funds and obtain the largest claim leverage ratio.

Afterwards, after choosing a separate "asset management" policy plan,Use the corresponding investment and wealth management premium payment strategy to maximize the potential for cash value accumulation.

Q1: I have bought a life insurance policy for myself, and I need to plan a new policy account. How much money can I save in the new policy account every year?

A1: The upper limit of the premium that can be deposited in a new policy every year can refer to the upper limit of the IRS for this policy and the 28% rule.

Q2：我有3张用来理财的人寿保单，是每一张的保费不要超过家庭收入的28%，还是3张的保费综合不要超过28%？

A1: It is the premium of all life insurance policies. It is not recommended to exceed 28% of household income.No matter how many life insurance policies you have, the overall premium is recommended to be controlled within 28%.

Q3: My annual premium has exceeded 28%, what should I do?

A3: If the current premium does not affect your living conditions, you can maintain this status.If the premium has affected your quality of life, or you want to reduce the overall premium, you can contact yourPolicy broker, Try to adjust the new premium amount.You can also contact a professionalInsurance consultant, Integrate your insurance policy and adjust to the new premium. (End of full text)

Your rating?Please click the star to rate

[Total votes: 1 The average score: 5]

Visitors: 2,516

How much of my family income should I use to buy life insurance? ｜Family financial management account book strategy

Take the ratio of household income as the baseline

Separated planning of protection insurance and wealth management insurance is better

More online lectures and new product columns