Life Insurance · July 8, 2026 · 2 min read
How much life insurance is actually enough?
Ten times your income is a rule of thumb, not a plan. Here is the math we actually walk families through — and why the number is usually smaller than people fear.
Ask the internet how much life insurance you need and you will get a number: ten times your income. It is a reasonable starting point and a terrible stopping point.
The real question is not how much life insurance should I buy. It is what would my family need to not have their life change on the worst day of it.
Start with obligations, not income
Sit down and write out what would actually have to be paid:
- The mortgage balance, if you want the house paid off outright
- Any other debt that would follow the household
- The cost of raising the children through the years they are still at home
- College, if that is a promise you have made
- A year or two of breathing room so nobody has to make big decisions while grieving
Add those together. Then subtract what already exists — savings, existing coverage, group coverage through work, and Social Security survivor benefits, which many families forget entirely.
The remainder is your gap. That is the number.
Why the gap is usually smaller than people expect
Two things surprise people. First, group coverage through an employer often covers more than they realized. Second, Social Security survivor benefits for a spouse with minor children are real money, and they run for years.
That said, group coverage disappears the day the job does. Coverage you own does not.
Term versus permanent, in one paragraph
Term insurance covers a defined stretch of years — usually the years when the mortgage is large and the kids are small — at the lowest cost per dollar of protection. Permanent insurance costs more and lasts for life, which matters for estate planning, final expenses, and business succession. Most young families should start with term. Most people with estates or businesses eventually need some permanent coverage. Plenty of households need both.
The most expensive policy is the one that lapses the year before it was needed. Buy what you will actually keep.
What to do next
Bring us your existing policies — including the one through work that you have never read. We will map the gap in about twenty minutes and tell you plainly whether you need more, less, or a different structure than what you have.
This article is educational and is not individualized financial, tax, or legal advice. Please speak with a licensed professional about your own situation.
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