HOW MUCH TERM LIFE INSURANCE DO I NEED?
A realistic, human approach — not a guess
One of the most common questions people ask is:
“How much coverage is enough?”
The honest answer:
There’s no single number that works for everyone — but there is a logical way to figure it out.
Why the “10× income” rule exists (and why it’s incomplete)
You’ll often hear:
“Get 10 times your income.”
That’s not wrong — it’s just incomplete.
It works as a starting point, but it doesn’t account for:
- Mortgage size
- Number of children
- Childcare costs
- Savings
- Lifestyle differences
A smarter way to calculate coverage
Step 1: Income replacement
Ask yourself:
“How many years would my family need my income?”
Most families choose 10–20 years.
Example:
$100,000 income × 15 years = $1,500,000
Step 2: Add major expenses
Think beyond income:
- Mortgage balance
- Student loans
- Credit cards
- Childcare
- College funding
- Medical or family support needs
Step 3: Subtract what you already have
Include:
- Savings
- Investments
- Existing life insurance
Real-life examples
Young family (kids under 10)
- Income replacement
- Mortgage
- Education Typical range: $1M–$2M
Single professional
- Debt protection
- Future planning Typical range: $250k–$750k
Near retirement
- Smaller income gap
- Final expenses Typical range: $250k–$500k
Why under-insuring is more common than over-insuring
Most families don’t realize how expensive it is to:
- Replace income
- Maintain lifestyle
- Avoid dipping into retirement accounts
It’s usually better to slightly overestimate than come up short.
