In order to determine the right amount of life insurance you can use a life insurance needs calculator.
However, when it comes to deciding how much life insurance you can buy, that will depend on several factors, including:
4. Insurance Company Guidelines.
5. Amount of life insurance you already own.
Usually, a life insurance company will allow you to buy up to 10-20 times your annual income in life insurance. So, if you earn $50,000 per year, you may be able to buy up to $1,000,000 of life insurance.
However, the life insurance company does ask you on the application if you already own life insurance, and if so, how much life insurance you own.
The insurer wants to make sure you aren't over insured.
And, you really don't want to buy more life insurance than you can afford, because if your financial situation changes, and you can;t make your premium payments, you may lose your life insurance coverage when you need it most.