How Much Life Insurance Do You Need?

how much life insurance do you need

If you bump into this article, it means you need life insurance coverage. You might be overwhelmed with a lot of information on the web, but the first thing you need to decide is how much life insurance you need. The type of insurance can tell you the amount of coverage and the premium you need to pay. Finding the right information is not complicated. By reading on, you can understand just how much life insurance do you need.

The following are useful questions to ask, and this article will give possible answers. 

Why Do You Need Life Insurance?

According to statistics from a study by LIMRA, 83 percent of individuals are not interested in getting life insurance because it is expensive. It may be right for many, but most of the time, people overestimate the true cost by 3x the actual price of a life plan. 

The first answer to the questions is if you have other people who depend on you, then safeguard them by getting coverage. If you do not have a large amount of savings in the bank, it is good to look at the best coverage that will fit into your needs and budget. Hence, it is the same for a spouse who is not working outside the home. There is an economic loss after the death of a stay at home mom/dad. Homemakers have a cash value of at least $500,000 a year. The role and duties of a stay-at-home person are endless.

What Type of Life Insurance Do You Need?

The type of life insurance plan influences the cost and the benefits that you get. If you are not well aware of it, it is good to talk to an expert and experienced agent. They can help you get through the entire process and give sound pieces of advice. If your main goal is to secure your family financially through a cash value after your death, whole life, or permanent life plan is the best choice. 

However, if you want to protect them from loss of income after your death, you may consider term life. The drawback of term life it has an expiration date but the least expensive.

How Much Life Insurance Do You Need?

In case you said yes to the above questions, you will get to the bottom of your curiosity. How much life insurance do you need. It is the most time-consuming part of the process, but it is not actually complicated. 

You may use a life insurance calculator available online to help you. It can give you a closer look at the amount you might need in the future. Most calculators will ask about your age and actual annual income and debt. They will compute the coverage plus the premium you might need to pay. 

For instance, a 40 years old male earns $50,000 every year, and you choose the recommended amount available for the coverage. Then you might get an estimate of $750,000 of coverage. 

However, it is just an example of the basic calculation, but it can offer you better ideas on the amount you need. If you want to know more right before you talk to an insurance agent, find out more about other factors that can influence the coverage.

Other Important Considerations

When calculating life insurance coverage, it is not really what you need but what your family needs after your death. Therefore, it depends on some factors:

  • How much money is needed to meet financial obligations?
  • How much money is needed to sustain the needs of the family for a year or more?


Moreover, debt is a huge factor in computing for the amount you need for coverage. If you have an ongoing mortgage and other debts that you might leave hanging after your death, then you should consider it. It is not fair to leave a huge debt in your family member’s hands, so it is good to get life insurance. It will pay off your debt in case of your untimely demise.


It is important to know your monthly expenses. If you have a monthly budget, then it is very easy to know the numbers. All you need to do is to compute how much you are spending a month. The computed $750,000 coverage might be enough, but that depends on your total monthly expenditure.

In case you die, and your family acquire $750,000 and invest it, they might get $37,500 every year as investment income. However, if the family has total expenses of more than that, then higher coverage is needed.


If you can save money every month, then you are lucky. One can also have other investments from the bank, bonds, mutual funds, and other assets. The amount of money you need from life insurance also depends on the amount of savings you have. If you have more savings, the lesser amount you need to apply for. However, it is also important to consider retirement expenses or college tuition of your children, etc. if you already have money for these expenses, you need lesser coverage. Otherwise, you need more coverage.

Other Source of Income

If your spouse is also working and will continue working after your die is also a factor to consider. Hence, compute for the spouse, annual income, and the years you expect him or her to work. 

 The Inflation Rate

Also, do not forget to consider the high inflation rate as this is a fact and part of life. The cost of living is increasing per year. So, it is good always to think ahead.

The Right Policy For You

After all of this information, you now have a better understanding of how much life insurance do you need. The next step is to contact an expert and licensed insurance agent from Coach B. Life Insurance. They can guide you throughout the process until you find the best policy that suits your needs.

If you have decided to get one or still have questions in mind, give us a call 1-800-342-1537, and we can help you.

Coach B. is an independent insurance agency that is working with large and reputable insurance providers. They can easily get the best prices for you by dealing with the companies personally on your behalf. It is also possible to get the policy that you need within 48 hours, depending on the insurers you choose. What they do best is to look for the most suitable policy for you.

Meet the team

About Coach B.

After starting his financial career with Phoenix Home Life Insurance Company back in 1992, Scott decided he wanted to provide people with an easier and more enjoyable way to buy life insurance. That was the start of Coach B. Life Insurance, whose mission is to be transparent, honest, and helpful to customers — without ever bugging or pushing them.

In the years since then, he has worked tirelessly to improve the process of shopping for insurance. His goal is to make sure that everyone who comes to Coach B. — whether they end up buying a policy or not — has the best possible experience.

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