How Much Life Insurance Do You Really Need?

This is the second-most-common question I get, right after "which type should I get?" The answer isn't one-size-fits-all, but there's a simple framework that works for most families.

Start with your income. A common rule of thumb is 10–12 times your annual income. If you earn $75,000 a year, that means $750,000–$900,000 in coverage. This ensures your family can replace your income for a decade or more.

Add your debts. Mortgage, car loans, credit cards, student loans — if you died unexpectedly, would your family be able to keep the house? Add up what you owe and factor that in.

Add future obligations. College tuition for your kids? Wedding costs? Aging parents you support? These are real expenses that don't go away.

Subtract what you already have. Existing savings, investments, any life insurance through work, and your spouse's income all reduce how much additional coverage you need.

Here's a quick example: if you earn $80,000/year, have a $250,000 mortgage, and want $100,000 per kid for college — that's roughly $1.15 million in coverage need, minus whatever you've already got saved or covered through work.

Want a precise number? Fill out the quick form on our contact page and I'll run the numbers for you. Free, no obligation.