How much life insurance do you actually need?
A method you can work through in ten minutes, without a multiplier.
You'll see rules of thumb everywhere — some multiple of your income, usually. They're popular because they're easy, not because they're accurate. A multiplier doesn't know whether you have a mortgage, three children, or a partner who earns more than you do.
The method below takes longer and gives you a number you can actually defend.
Step one: add up what would need replacing
Start with the obligations that don't disappear, then add the income that would.
- Remaining mortgage balance
- Other debts that wouldn't be forgiven — loans, personally guaranteed business debt
- Your income, multiplied by the number of years it would need replacing
- Childcare and household costs your household currently absorbs unpaid
- Future education costs you intend to fund
- Final expenses and estate settlement costs
Step two: subtract what already exists
This is the step people skip, and it's usually the difference between a sensible number and being oversold.
- Existing life insurance, including coverage through work
- Savings and investments that would be available
- Your partner's income and earning capacity
- Survivor benefits your household may be eligible for
Step three: sanity-check the shape, not just the size
A single large policy isn't always the right answer. If most of the need disappears when the mortgage is paid and the children finish school, layering two terms of different lengths may cover the same obligation more efficiently than one long policy.
The number tells you how much. The shape of the obligation tells you how long — and both matter.
A caution about the coverage you already have
Group coverage through an employer is genuinely valuable, but it's usually tied to the job. If you change employers, it may not follow you, and the ability to convert it to an individual policy has deadlines. Counting on it as permanent is a common and expensive assumption.
Common questions
It's a starting point for a conversation, not an answer. Two households with identical incomes can have completely different needs depending on debt, dependents, and existing coverage.
Yes — as an offset. The question the calculation answers is what gap would remain, and existing household income is part of what fills it.
Buy what you can and revisit it. Being underinsured is a much better position than being uninsured, and coverage can often be added later, though age and health affect what's available.
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This page is general information, not advice about your specific circumstances. A licensed insurance professional can tell you what’s actually available to you.
General information only, not insurance advice. Coverage, availability, and terms vary by insurer and by state, and are subject to underwriting. Quote My Policy LLC is a licensed insurance producer. Nothing here binds coverage.