How much term life insurance do I need?
The right amount covers the income, debts and goals your family would lose without you. Use the common ways to estimate below, then let us help you fine-tune it.
The 10 to 12 times income rule
A common shortcut is 10 to 12 times your annual income. It is quick, but it ignores your mortgage, savings and your children’s ages, so treat it as a starting range.
The DIME method
Add Debt, Income for the years your family needs it, your Mortgage and Education costs, then subtract savings and existing coverage. Many families also add about $15,000 for final expenses.
What to count
Add
- Income for the years your family needs it
- Mortgage and other debts
- Childcare and college costs
- Final expenses
Subtract
- Savings and investments
- Existing life insurance
- Work coverage you could lose with your job
Remember
- Stay-at-home parents need coverage too
- Review after marriage, a baby or a new home
Frequently asked questions
Is 10 times my income enough?
For many families it is a reasonable start, but a large mortgage or young children can mean you need more. An agent can fine-tune it.
Do I need life insurance if I am a stay-at-home parent?
Often yes. Childcare, housekeeping and other work your family would have to replace has a real cost.
Does my employer’s life insurance count?
It can, but group coverage is often modest and usually ends when you leave the job, so do not rely on it alone.
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