How much life insurance do I need?
A practical starting point is 10 to 12 times your annual income. If you earn $75,000 a year, that puts you in the $750,000 to $900,000 range. But your real number depends on what you owe, how many people count on you, and how long they would need that income. Add your mortgage balance and other debt to get a more honest picture. The best way to get your actual number is to run it through the calculator below.
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Use the free calculatorHow to think about the number
Think of life insurance as an income replacement tool. If your family depends on $75,000 a year from you, they need a lump sum large enough that they can invest it and replace that income, or cover near-term expenses without running out of money.
A common way to break it down: income replacement (10x salary) plus your remaining mortgage, plus your other debt, minus savings you already have. That gives you a number specific to your life, not a generic rule of thumb.
Common questions
How much life insurance does the average family need?
The most common starting point is 10 to 12 times your annual income. A family earning $80,000 a year typically needs $800,000 to $960,000 in coverage. Add your mortgage balance and any other debt on top of that for a more precise number. The goal is to replace your income for the years your family would need it most.
Does my mortgage factor into how much coverage I need?
Yes, and it is often the biggest single factor. If your family could not afford to keep the house without your income, the full remaining mortgage balance should be part of your coverage number. A $300,000 remaining mortgage added to 10x income coverage makes a significant difference in the total.
Should I count Social Security survivor benefits?
You can factor them in, but conservatively. Social Security survivor benefits depend on your work record and your spouse's age. For children under 18, the surviving parent receives a benefit, but the monthly amount is often not enough to replace a full income. Do not plan on it as a primary income source.
Is $1 million in life insurance too much?
Not if your income supports that level. For a 35-year-old earning $85,000 with a $350,000 mortgage and two kids, $1 million in coverage is reasonable and affordable. A 20-year term policy at that level for a healthy non-smoker often costs less than $50 a month.
Does my coverage need to grow as my family grows?
Yes. Having a child, buying a larger home, or taking on more debt are all reasons to revisit your coverage number. Many people buy a base policy when they are young and supplement it later. A quick review every 3 to 5 years keeps your protection aligned with your real life.
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