When looking for life insurance you should evaluate some important questions.
Am I being realistic in how far the proceeds will go for my family? How long of a term should I buy or should I get permanent policy.
There are different schools of though on how much insurance to carry. I have never met anyone who had a claim who said that they received too big of a benefit. With the cost of insurance dropping it is very affordable to get a lot of death benefit at a low cost (this is based on age and health of course). I would certainly err on the side of too much rather than too little. I suggest to my clients that they buy enough death benefit that will spin off enough income without touching the principal. For example, if Client A makes $50,000 a year, they would need 1 million dollars invested conservatively at 5% to spin off $50,000 a year income. That is not considering any inflationary factor, but just maintaining the income level for the family at a minimum. There are other ways to estimate this, but this is a good rule of thumb I like to use.
It is important to first and foremost get the amount that you need. Don’t buy to little permanent policy just because you want permanent and can only afford a fraction of what you need. If you need 1 million and can only afford twenty year term, just get the term in place and you can always convert all or part of the term to permanent later. A lot of our clients will buy a blend of cash value life insurance and term. They may have a budget to buy $100,000 0f whole life insurance and $900,000 of term. It is always important above all else to get the amount you need.