Planning
How Much Life Insurance Do I Really Need?
A simple framework to calculate the right coverage amount based on your income, debts, and family goals.
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Start With Your Income
A widely used starting point is 10–12 times your annual income. If you earn $75,000 a year, that suggests coverage between $750,000 and $900,000. This ensures your family can replace your income for a decade or more if something happens to you.
Add Your Debts and Obligations
Your coverage should also account for any outstanding debts — mortgage balance, car loans, student loans, and credit card debt. These don't disappear when you do. Your policy should be large enough to pay them off so your family isn't burdened.
Factor in Future Expenses
Think about future costs your family will face: college tuition for your children, childcare costs, and everyday living expenses for years to come. These can add hundreds of thousands of dollars to your coverage need.
Subtract What You Already Have
If you have savings, investments, or existing life insurance through work, subtract those from your total need. Employer-provided coverage is typically only 1–2x your salary — rarely enough on its own.
The DIME Method
A simple formula many advisors use is DIME: Debts + Income replacement + Mortgage + Education. Add those four numbers together and you have a solid baseline for the coverage you need.
Get a Personalized Analysis
Every family is different. The best way to know your exact number is a free needs analysis with a licensed agent who takes the time to understand your full financial picture — not just plug numbers into a calculator.