How much life insurance is enough? Too little, and your family struggles. Too much, and you’re overpaying for coverage you don’t need. Here’s a simple way to figure out the right number.
The Quick Method: 10-15x Your Income
If you want a fast answer, multiply your annual income by 10-15. That gives you a reasonable starting point:
- Earn $50,000/year → $500,000-$750,000 in coverage
- Earn $75,000/year → $750,000-$1,125,000 in coverage
- Earn $100,000/year → $1,000,000-$1,500,000 in coverage
The Precise Method: Add Up Your Needs
For a more accurate number, add up these categories:
| Category | Your Estimate |
|---|---|
| 🏠 Mortgage balance | $_______ |
| 💳 Other debts (car, credit cards, student loans) | $_______ |
| 🎓 Children’s education (per child) | $_______ |
| 💰 Income replacement (annual income × years needed) | $_______ |
| ⚰️ Funeral expenses | $10,000 |
| 🏥 Outstanding medical bills | $_______ |
| = Total coverage needed | $_______ |
Then subtract any existing coverage (employer life insurance, savings, etc.) to get the gap you need to fill.
Real-World Examples
Example 1: Young Family
Sarah, age 32, married, 2 kids, earns $65,000/year
- Mortgage: $250,000
- Car loan: $18,000
- Kids’ college: $100,000 (2 × $50K)
- Income replacement (10 years): $650,000
- Funeral: $10,000
- Total: ~$1,028,000 → A $1,000,000, 20-year term policy at ~$35/mo
Example 2: Empty Nester
Robert, age 55, married, kids grown, earns $80,000/year
- Mortgage remaining: $120,000
- Credit cards: $8,000
- Income replacement (5 years): $400,000
- Funeral: $15,000
- Total: ~$543,000 → A $500,000, 10-year term at ~$95/mo PLUS a $15,000 final expense policy at ~$55/mo
Example 3: Retiree
Margaret, age 68, retired, Social Security income
- No mortgage or major debts
- Funeral costs: $10,000-$15,000
- Total: $10,000-$15,000 → A final expense (whole life) policy at ~$50-$80/mo
Let Me Help You Calculate
Every family’s situation is different. I’ll walk through the numbers with you, figure out exactly what you need, and find the most affordable way to get there.
Call (919) 944-8443 or schedule a free consultation. No pressure, no obligation — just honest answers.