How much life insurance do you actually need?
Ten times income is a poster, not a plan. Two methods that produce a number you can defend in about ten minutes.
- Add the jobs the money has to do: debt, income, mortgage, education (DIME), then subtract what you already have.
- A second check is human life value: a slice of earnings for the years you would have worked.
- Buy the amount you would be glad your family had, not the amount that makes the premium feel invisible.
Method 1 — DIME
Debt. Credit cards, student loans, car notes, business guarantees. Income. How many years of take-home pay would keep the household running (often 10–15 while children are dependent)? Mortgage. The remaining balance, or enough that the survivor can keep or sell on their own terms. Education. A realistic number for each child, not a university brochure.
Add those four. Subtract savings, existing life insurance, and Social Security survivor benefits if you want to be precise. The remainder is a working face amount.
Method 2 — Human life value
Take annual income after taxes, multiply by the years until the younger spouse would retire, then take a fraction (often 50–70%) because a household does not replace every dollar of a worker’s spending. This catches people who have little debt but a high income the family lives on.
What to ignore
“Whatever you can afford.” Affordability decides term vs. permanent mix, not whether a $150,000 policy covers a $400,000 mortgage. If the right number is uncomfortable, buy term for most of it. That is what term is for.
Do both spouses need coverage?
If a spouse’s unpaid work would cost money to replace — childcare, a family business, a household that cannot run on one schedule — yes. Size it to the cost of replacement, not to their W-2.
Should I include Social Security?
You can. Treat it as a maybe, not a floor. Benefits depend on work history and family status. We often size coverage as if survivor benefits are a bonus.
Educational only. Products, features, and availability vary by carrier and by state. This is not an offer of insurance, tax advice, or a recommendation of any specific policy. Licensed in AL, AZ, AR, CO, ID, LA, MS, MT, NC, NM, SC, TN, UT, WV, WY. Iron Tusk Insurance Group, LLC. National Producer Number #22311194.
Walk the number with an agent.
Bring debts, income, and any existing policies. We will land on a face amount and a term length.