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What Is The Right Amount Of Life Insurance For You?

You will need to have enough life insurance to cover your debt and other financial obligations after you’re gone. Begin to look at your financial needs and resources as soon as possible as we are not promised tomorrow.


How much life insurance do I need for my spouse

Keep in mind when adding up life insurance needs:

  • Make life insurance a part of your overall financial plan. Include future expenses like college cost, future growth of your income, and assets. That plan should consider future expenses, such as college costs and your income or assets’ future development. 
  • Don’t fall short or skimp. Buy a little more coverage than you need to cover future debt and inflation. Don’t forget your income will rise and so will the expenses. You don’t know what they will be, but if you plan on a little more, you will know that your spouse and kids will maintain the lifestyle they are used to.
  • Talk with your spouse and go over the figures and the cost. Make sure you are on the same page when deciding what amount you will need and can afford. 
  • Consider buying multiple, more minor life insurance policies instead of one more comprehensive policy. It will help over time as your coverage needs to change. For example, you could get a 30-year term life insurance policy to cover your mortgage loan until it’s paid. Or a 20-year plan to protect the kids until they get out of college. Look at different nonmedical term quotes to estimate your cost.

life insurance questions - coach b insuranceCoach B. recommends parents of young children choose 30-year versus 20-year terms, so there is plenty of time to build your assets. By going long-term when more youthful, there is less chance of being shot and have to buy coverage at an older age that would carry a much bigger price tag.

How Much Life Insurance Do You Need?

What is the right amount of Life Insurance for You? Great Question? You’re most likely observing a pattern—answering yes towards these initial couple questions have you here, located at the heart of the information, questioning exactly how much life insurance you will require. This specific component requires the majority of work; nevertheless, it still doesn’t have to become that complicated.

Actually, as a typical rule, please take a look at our simple Life Insurance Needs Calculator to come up with an answer which will likely wind up being very close to the correct solution for you. Follow the main chart to find your very own age, and then multiply the suggested or Maximum Available number by your very own up-to-date total annual income, and voila—you can have the total amount of protection you ought to be considering.

For instance, if you happen to be a 38-year-old man who earns $55,000 per year in earnings, and you choose the suggested quantity of coverage attainable, you are going to arrive at $825,000 of insurance coverage—just that simple.

How are life insurance costs calculated?  This is a standard calculation; however, it provides you with an excellent idea regarding what to look at. Suppose you wish to look a little further before talking with a life insurance representative regarding the right amount of life insurance for you. Let’s check out a couple of other factors.

How much life insurance do i need calculator

Life Insurance Need Calculator
This calculator will help you to decide how much life insurance you need if your survivors invest the life insurance benefits they receive.

Funeral cost, estate taxes, etc. ($):
Amount needed to pay off non-mortgage debt ($):
Amount needed in emergency fund ($):
Amount needed in college fund ($):
Expected average annual living expenses ($):
Expected spouse's average annual income after taxes ($):
Annual Social Security Benefits ($):
Spouse's current age (#):
Value of current liquid assets ($ total of savings, investments, etc.):
Expected survivor's investment strategy:
Life insurance needs:

Life insurance costs

Things to Consider When Calculating Life Insurance Needs

When buying a life insurance plan, surprise — it is honestly not likely exactly how much you need — but actually how much your family will require during the moment of one’s death. This approach will depend on a couple of things:

  • What will it take to meet my immediate obligations? Use our life insurance payout calculator.
  • What is the future income amount needed to sustain the household?

Debt Owed

Life insurance meaningBesides a potential balance on one’s mortgage, do you hold any other personal debt? If so, that will probably mean you tend to be paying out more funds as compared to what you are earning—unless you don’t prefer paying off all of your account balances in a regular fashion, which generally is a less than ideal habit too. Therefore, if this is the situation, you will likely want to get the right amount of life insurance for you to cover that debt.


What are your spending habits every month? In case you are living with a spending budget, this one is a straight forward exercise you most likely already have the quick answer. You must know the amount of money you are spending every month. That previously mentioned $825,000 of term insurance coverage probably come across as a significant amount. Still, in actuality, it may not be the right amount of life insurance for you. 

Let’s suppose you pass away, and one’s family gets the $825,000. Should they begin to invest it utilizing an income diversity strategy then make five percent yearly, which would mean $41,250 of annual investment income. Nonetheless, if your family members will depend on more than $41,250 every year, one will likely need additional coverage.


If your capable of saving more money each month, good for you. Also, you may have held from different investments aside from life insurance—like bank accounts, money market accounts, mutual funds, CDs, bonds, stocks, and other assets, don’t disregard these. Based on exactly how much one keeps, you might require less life insurance as an outcome. Then again make sure to take into account factors such as your retirement expenditures, the college tuition expenditures for your kids, etc. Whether you currently have that money put ahead concerning these sorts of expenses, you will certainly not require additional protection. Alternatively, you guessed it, and you will likely need more insurance coverage.

Spouse’s Income

Let’s suppose your spouse will likely keep working following your death. Precisely what is his or her yearly earnings and how much longer would they anticipate to work? You might want to answer these questions while furthermore taking into account their marginal tax rate—which is the rate of taxation you have to pay on your maximum dollars of income.


Finally, don’t overlook the fact to calculate the rate of inflation because—and this is a reality of life—the cost concerning living keeps heading up year after year.

Finding That Life Insurance Policy That’s Exactly Right For You

So now that you possess a fairly good idea of things to look for whenever deciding precisely how much life insurance do i need as a single person?  The right amount of life insurance coverage you need and the tools necessary to compute it—it’s time to speak to a licensed Coach B. Life Insurance agent who will talk you through the whole process of finding a policy that will best suit your needs all while fitting your budget.

Once you are ready to apply—or if you have a few more questions—pick up the phone and call 1-800-342-1537.

Being an independent insurance agency, we work with each of the best insurance companies, so we will use it to get the best price for you and handle any worries you might have. We negotiate with the insurance companies upon your behalf, and the policies are issued immediately or inside of 48 hours, depending on the insurance service provider you eventually choose.

Finding what is the right amount of life insurance for you is what we do at Coach B. How much life insurance do i need at age 55?  Great Question! Let’s talk about your needs and precisely what we could do to assist you.

Frequently Asked Questions

How do you determine how much life insurance you need?

The best way to determine how much life insurance you need is to assess your family’s financial situation. You’ll want to consider factors like the size of your family and their financial needs, any debts or existing policies you may have, and any future goals like college expenses or retirement. Once you know what your family will need, you can estimate a coverage amount that can provide for them if something should happen to you.

What Is a Rule of Thumb for How Much Life Insurance You Need?

A commonly used life insurance rule of thumb is to get a policy worth 8 to 10 times your annual salary. This should help provide sufficient funds to cover funeral costs, debts, and any ongoing living expenses in the event of your passing.

What’s the minimum amount of life insurance coverage I need?

The answer to this will vary from person to person, but typically, life insurance experts recommend that you have coverage that is five to ten times your annual salary. This should provide enough financial protection for your family in a tragedy.

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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