Life insurance is one of the most loving financial decisions you can make – but how much is enough? Too little leaves your family exposed; too much strains your budget. Here is a practical way to find your number.
Start With the DIME Method
Debt: total your non-mortgage debts. Income: multiply your annual income by the years your family would need support (often 10+). Mortgage: add your remaining balance. Education: estimate future college costs per child. The sum is a solid starting point.
Term vs. Whole Life
Term life delivers the most coverage per dollar and fits most working families – cover the years until the mortgage is paid and kids are independent. Whole life lasts a lifetime and builds cash value, making it useful for final expenses and estate planning.
Adjust for Your Situation
Stay-at-home parents need coverage too – replacing childcare and household work is expensive. Business owners may need key person or buy-sell coverage. And existing savings, employer coverage, and Social Security survivor benefits all reduce the amount you need to buy.
Lock In While You Are Healthy
Premiums rise with age and health changes. The best time to apply is now – and a licensed agent can compare dozens of carriers to find your best rate.
Frequently Asked Questions
Is employer life insurance enough?
Usually not – it commonly equals 1-2x salary and ends when you leave the job. Most families need 10x or more.
Can I have more than one policy?
Yes. Stacking term policies of different lengths (“laddering”) is a smart way to match coverage to changing needs.
Mike Sullivan
With over 20 years of experience, Mike has helped thousands of individuals and families find the right coverage and make confident healthcare decisions.
