This is probably the most asked question over my 30+ years in the life insurance industry.
Ideally, I recommend to my clients to only live off the interest generated from their tax free life insurance proceeds.
For example, let's say you need $50,000 per year to cover your bills and leisure activities. If you earn a 5% return on your money, then a $1,000,000 life insurance policy would generate $50,000 per year in income.
Please note, this is a very basic example that does not take into account taxes and inflation. However, it does give you a quick example as a guideline when considering what amount of life insurance to purchase.
Other key variables to consider in your decision is what are your current debts? How many children do you have? Do you wish to remain in your current home or need to downsize? Do you wish to keep your current lifestyle?
We welcome your questions at any time. Thank you!