Choosing the Right Amount for Whole Life Insurance Premiums

When choosing the right amount for whole life insurance premiums, consider building a 10-pay life program with premiums equivalent to 10 years' worth of premiums. Ensure the amount does not limit other advantaged investing such as 401K, Roth IRA, or HSA. It should not be something that harms you by limiting your ability to make lifestyle decisions or commitments. The premium should be significant but also feasible and consistent, not hindering your ability to pay it in case of job loss or other financial changes. A good starting point may be a few percent of annual income, typically 3 to 5 percent, which allows for investments into retirement accounts without being overly burdensome.