• Replaces lost income
• Covers everyday living expenses
• Keeps your loved ones financially secure
   

• Pays off mortgages, loans, and credit cards
• Handles funeral and medical expenses
   

• Helps with estate planning and inheritance
• Keeps family businesses running smoothly
• Provides tax-free money when it’s needed most
   

• Certain policies grow cash value you can use later
• Acts as an extra safety net in retirement
   

• Pass on wealth to children or grandchildren
• Support a favorite charity or cause

• You can relax knowing your family is protected—no matter what.

One reason for choosing a life insurance policy is to figure how much your dependents will need after you’re gone. In order to choose the face value (the amount your policy pays if you die) of your life insurance you should consider the following:

• Current Debt: All of your debts must be paid off in full, including car loans, mortgages, credit cards, etc. 

• Income Replacement: One of the biggest factors for life insurance is for income replacement, which will be a major determinant of the size of your policy. If you are the only provider for your dependents you will need a policy payout that is large enough to replace your income plus a little extra to guard against inflation. 

• Future Obligations: Take into account any future financial expenditures that you would like to help cover. For example, if you want to pay for your child's college tuition or cover the cost of your final expenses you will have to add this to the amount of coverage you want.
  

Typically a term life insurance policy is effective to cover debt and income replacement, whereas a whole life policy may be better for final expenses and future planning. 

Once you determine the required face value of your insurance coverage, you can start shopping around for the right policy (and a good deal).

Obviously there are other people in your life who are important to you and you may wonder if you should insure them. As a rule, you should only insure people whose death would mean a financial loss to you. If you have a spouse or partner that also is a contributor to the family income, then it would make sense to go through the same exercise to determine the face value of the policy.