How Much Life Insurance Do I Need?

Use the DIME method: Debt (total outstanding debts), Income (years of income to replace x annual salary), Mortgage (remaining balance), Education (children's college costs). Example: $50K debts + $750K income replacement (10 years x $75K) + $200K mortgage + $100K education = $1.1M in coverage needed.

$500,000 may be enough for single-income families with small mortgages and no children's education to fund. For dual-income families or those with large mortgages, $500K is often insufficient. The average American family needs $750K-$1.5M based on the 10-15x income guideline.

You may still need life insurance if: you have co-signed debts (student loans, business loans), you support aging parents, or you want to cover funeral costs. If no one depends on your income and you have no shared debts, life insurance may be optional. However, buying while young locks in low rates.

Yes. Even if one spouse does not work, they provide valuable services (childcare, household management) that would cost $30,000-$60,000/year to replace. Both spouses should have coverage — the working spouse typically needs more, but the non-working spouse's coverage should reflect replacement costs.

Review every 1-3 years and after major life events: marriage, birth of a child, home purchase, salary increase, divorce, or paying off a major debt. Your coverage needs change over time — you may need more (new child) or less (mortgage paid off, kids independent).