The short answer: enough to replace what your family loses if you're not here. The real answer depends on your situation — and most online calculators oversimplify it because they don't account for how families actually live.
The "10x your income" rule is the most common starting point. If you make $60,000 a year, you'd buy $600,000 in coverage. It's simple, and for a lot of people, it's close enough.
But it misses things. It doesn't account for a mortgage, childcare costs, student loans that don't die with you, or the reality that your family's expenses don't drop by half just because one income disappears. And if you're a business owner, it misses the fact that your income isn't guaranteed — your coverage needs to account for what your family would need if the business stops generating revenue too.
Instead of a multiplier, add up what actually needs to be covered:
That number looks big. But a $1.5 million 20-year term policy for a healthy 35-year-old costs around $60-$80 per month. That's less than most car payments.
Your business is an asset, but it's also a liability if it depends on you. If you run a salon, a practice, a contracting company, a creative agency — your family might not be able to run it or sell it quickly. Coverage should account for business debt, lease obligations, and the income gap while your family figures out next steps.
Key-person insurance is separate from personal coverage. If you have employees or a business partner who depends on the business continuing, that's its own policy. But at minimum, your personal coverage should assume the business income stops.
Everything above applies, but the stakes are higher because there's no second income to fall back on. Your coverage needs to fully replace your income for as long as your kids need support, plus cover the cost of someone else providing the care you currently provide — which most people underestimate by a lot.
You might not need much right now. But locking in a policy while you're young and healthy is significantly cheaper than waiting. A 25-year-old pays roughly half what a 35-year-old pays for the same coverage. And if your health changes between now and then — a diagnosis, a medication, a hospitalization — rates go up or coverage becomes harder to get.
Even a small policy ($100,000-$250,000) at 25 covers funeral costs, any co-signed debt, and gives you a locked-in rate for the future.
A small whole life policy on a child or grandchild — typically $10,000-$50,000 — does two things. First, it locks in their insurability. If they develop a health condition later in life, they already have a policy in force that can't be taken away. Second, it builds cash value over decades that they can access as adults — for a down payment, starting a business, or supplementing retirement.
It's not a replacement for your own coverage. But as a long-term gift, especially in families where health conditions run generational, it's one of the few financial instruments that guarantees future access to coverage regardless of what happens to their health.
Run the math backwards. If you died tomorrow, how many months could your family pay the bills? If the answer makes you uncomfortable, you need coverage. The exact number matters less than having enough to keep your family in their home and out of financial crisis.
Life insurance rates increase 8-10% per year of age. A healthy 30-year-old might pay $35/month for $500,000 in coverage. By 40, that same policy costs $65/month. By 50, it's $140/month — if you still qualify. Health changes, medications, and diagnoses can push rates even higher or limit your options entirely.
Today is the youngest and healthiest you'll ever be. That's not a sales pitch. It's actuarial math.
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