It is a good idea for all Texas residents to have some type of life insurance, but you should also have a good idea what you need before an insurance agent tries to sell you on a policy you do not need. It is hard to know where to start, but according to Policygenius, the rule of thumb is to obtain coverage that is 10-12 times your annual income. You may need to adjust your policy based on your personal circumstances.

When you are choosing your life insurance amount, there are five financial obligations that you should consider. If done right, life insurance can provide for your family and loved ones long after you are gone.

The first obligation to consider is debt. If you have debt when you die, your family could be responsible for part or all of it if they were signed on the loan or debt. Leave enough insurance that they can continue to pay off any debt or loans they will be left with.

The second thing to consider is how many dependents you have. If you are responsible for children or a parent, the policy may need to be increased by quite a bit.

Third, consider the cost of a college education if you have children. If your kids have the chance at obtaining an education, they are more likely to move upward in life and be able to care for themselves. Tuition costs are often a huge deterrent for those who want to go to college so if your life insurance covers it your kids are better off.

Fourth, consider what type of financial cushion you want your loved ones to have. Think of things like medical expenses, food and family vacations. Add up your fixed expenses and monthly bills to determine how much money your family will need.

Finally, you must consider your end of life expenses. Your family will need to pay for your burial and funeral home costs. To save your family from the financial burden it can be beneficial to add these things into your life insurance policy.

This is intended for educational purposes and should not be interpreted as legal advice.