Life insurance provides you with security that comes with knowing that your loved ones will be taken care of. How much should you get from your broker over the long term? In this short video, Dave Ramsey shares his life insurance tips.

Life insurance is structured an arrangement that when you pass away your loved ones will receive a lump sum of money which is stated in the policy. One of the best ways to utilize this lump sum is to invest it and receive approximately 10% of the return from your investment. Mutual funds, in particular they are a good investment because they help spread risk. The amount of life insurance that you will require depends on the amount your family wants to have to live off.

The simple equation is one of the keys to success. Consider the amount you want to live on and multiply the sum by 10. If you wanted to be able to live off $100,000 every year, you’d require $1,000,000 in life insurance. If you’re already investing in it into this type of insurance, the amount could be less. Simply subtract the amount that you’ve put into this figure. It is as simple as that.

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