Is there any basic mathematical formula you should follow when trying to select an amount on a life insurance policy? It has been suggested the amount of life insurance you purchase should be 10 to 20 times more than what you earn in an annual salary. This way, you can be sure a significant sum of money will help cover the expenses your family may face and do so for at least a few years. The problems your family may face in the event of your passing could be such that a significant life insurance settlement will be required for them to weather the storm. A settlement of 1000% to 2000% of your annual salary might very well be able to do just that.
Of course, it is also suggested you look at the various different costs and expenses your family will have to contend with. There may be massive expenses such as college tuition or medical care that could require you to purchase even more insurance than 20x your annual income. Do not worry though. There are likely providers in The State Insurance Guide more than capable of covering such expenses. Discussing your own individual situation with a insurance sales representative is recommended.