How Much Life Insurance Do I Need?

Anthony Greer

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The answer is different for everyone. There are so many factors to consider when determining your life insurance needs, including your age, financial situation, and marital status. 

Life insurance policies can be daunting to think about or sift through, but we’re here to help. Here are a few ways to answer the trivial question, “How much life insurance do I need?”

What’s the Minimum Amount of Life Insurance That I Need?

Financial experts suggest your life insurance policy should be at least five-to-ten times the amount of your salary. However, the minimum amount you need depends on your situation. What do you need coverage for?

Replace Your Income

If you’re looking to replace your income so that your family can maintain their standard of living, then you should think about how many years’ worth of that income they’ll require. If you and your spouse have a 10-year-old child and you want to make your death benefit last until they’re 18, then you should get a policy that’s 8 years’ worth of your income. 

Pay off Debt

No one should ever have to worry about debt while they’re grieving. If you have debts, your death benefits can cover them, taking the weight off of your loved ones’ shoulders. 

For example, if you’re single, but your parents co-signed on a loan to assist you in buying your first house, you can get a policy for the amount of your mortgage will help them. Otherwise, your parents may assume the debt upon your passing.

Funeral and Burial Expenses

If you don’t wish to burden your beneficiaries with your end-of-life costs, you can purchase final expense insurance. It’s affordable, and can cover the cost of your funeral and burial, so your loved ones don’t have to worry about it. 

What’s My Current Life Scenario?

In our life insurance policy guide, we talk about the various life scenarios that people are in and what their potential policy needs may be. These scenarios include:

  • Single
  • Married, no children
  • Married, with children
  • Single parent
  • Married, empty nester
  • Retired senior

Different life scenarios require different policies for different reasons. Married couples without children may have a dual income and debts to pay off. Meanwhile, empty nesters may be helping their kids pay for college.

Should I Get Term or Permanent Insurance?

Term insurance policies are issued for a set number of years. If you pass during that time period, your beneficiary will receive the death benefit outlined in your policy. If you want to simply have the minimum amount of life insurance you need, a term policy is your best bet. These policies start at only a few dollars a month.

Permanent insurance policies cost more, but come with many perks, like cash-value and living benefits. Permanent life insurance also covers you for the duration of your life, provided that you’re paying the monthly premiums. 

What are the Average Life Insurance Rates?

That’s a bit of a loaded question, because there are average rates for: 

  • Age
  • Gender
  • Policy size
  • Policy length
  • Occupation
  • Health 
  • Lifestyle choices (smoker/non-smoker, alcohol consumption, dangerous hobbies)
  • And much more

Here are some of the average rates based on the categories above.

So How Much Life Insurance Do I Need?

If still don’t the answer, we can help. We made it easy for you to apply for reliable life insurance through our simplified and streamlined online application process. No exam | No waiting | No hassles | Fast, free quote!

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