Start With Income Replacement
If people depend on your income, estimate how many years of support you would want the policy to provide. The answer may change based on a spouse’s income, children’s ages, retirement timing, or other household resources.
Add Major Obligations
Mortgage or rent, other debts, education goals, final expenses, childcare, and special family needs can all increase the amount you may want to protect.
Subtract Resources You Intend to Use
Existing life insurance, savings, investment assets, or other resources may reduce the remaining coverage gap. Be thoughtful about which assets you truly want your family to spend after a death.
Do Not Treat a Rule of Thumb as a Final Answer
Income multiples can provide a rough starting point, but they may miss debts, stay-at-home caregiving value, education goals, or existing assets. A needs-based estimate is usually more informative.
Revisit the Number When Life Changes
- Marriage, divorce, or a new child
- Buying or paying off a home
- Major income changes
- Starting or selling a business
- Changes in savings, debts, or beneficiaries
Use the Number to Compare Policies
Once you have a target amount, compare policy type, term length, guarantees, underwriting, and premium. A lower premium is only meaningful if the coverage amount and duration still fit the goal.