Most people approach life insurance one of two ways. They either grab a round number that sounds big enough and hope it's right, or they assume it's wildly expensive, get overwhelmed, and put the whole thing off for another year.
Both are understandable. Both usually leave families in the wrong spot.
I want to give you a better way. Not a rule of thumb, but the actual method I walk clients through to land on a number that fits their life. By the end of this you'll be able to sketch your own.
First, let's kill the two biggest myths
Myth one: "ten times your income." You've probably heard it. It's not a terrible starting point, but it's an average, and averages describe crowds, not families. A 32-year-old with two young kids and a 28-year mortgage and a 55-year-old whose house is paid off could have the same income and completely different needs. "10x" tells neither of them the truth.
Myth two: "it's too expensive." This one costs people more than any other, and the research backs it up. LIMRA's 2026 Insurance Barometer Study, the most recent available, found that life insurance remains one of the least understood financial products, and that confusion, not a lack of interest, is what keeps most people from buying. Cost is the biggest misunderstanding of all. Research has found younger adults overestimating the price of a basic term policy by as much as ten times what it actually costs. Read that again. People aren't skipping coverage because they weighed it and decided against it. They're skipping it because they believe it costs many times what it really does.
For a healthy person in their thirties, that $250,000 policy often runs less than a couple of streaming subscriptions. The fear is real. The price tag behind it usually isn't. If you want to see a ballpark for your own age, there's a quick coverage estimator on my site that takes about a minute.
The insurance nobody makes you buy
Here's something I've come to believe after years of these conversations. Most people don't skip life insurance because they've decided their family doesn't need it. They skip it because of how they file it in their minds. They see it as an expense, a bill, a cost, rather than what it actually is: a protective asset, and maybe the most important one they'll ever own.
Think about how the other insurance in your life works. Your mortgage lender requires homeowner's insurance. Your state requires auto insurance. Your job or the law pushes you toward health insurance. Those are effectively mandatory, so you pay for them without much debate.
Life insurance is the one nobody forces on you. No lender, no state, no mandate. So it quietly slides to the bottom of the list, year after year. Here's the irony that should stop you cold. Every other policy on that list protects you while you're still here to benefit from it: your home, your car, your health, your ability to earn. Life insurance is the only one that does its job after you're gone, for the people who were counting on you. It isn't protecting a thing you own. It's protecting the people you love from the one loss that can never be undone.
When that protection isn't there, the consequences aren't abstract. I've watched families drain their emergency savings, or lean on donations and online fundraisers, just to cover a funeral. The funeral is the small part. The larger gap is the income that walked out the door, the mortgage that still comes due every month, the lifestyle the family can no longer sustain. All of it landing at the worst possible moment of their lives.
None of that happens because those families didn't love each other. It happens because the one policy that could have caught them was the one nobody made them buy.
The real method: four numbers, minus what you already have
Here's how you actually find your number. Add up what your family would need, then subtract what they'd already have. What's left is the gap, and the gap is your coverage target.
What your family would need:
- Debt. Everything that doesn't disappear when you do. Credit cards, car loans, personal loans, anything co-signed.
- Income replacement. What your household needs each year to keep functioning, times the number of years they'd need it. A common marker is "until the youngest is grown and on their own."
- Mortgage. The remaining balance. Not the monthly payment, the payoff.
- Final expenses and goals. Funeral and medical costs, and anything you'd want to fund on purpose, like your kids' education.
What they'd already have:
- Existing coverage. Any policy you own, plus whatever you carry through work.
- Liquid savings. Money your family could actually reach and use.
Add the first group, subtract the second, and you have your real number.
Let's run a real one
Say you earn $85,000. You've got a $280,000 mortgage, about $40,000 in other debt, and two kids you'd want to help through school. You'd want your family covered for roughly fifteen years while the kids finish growing up.
- Income replacement: $85,000 × 15 years = $1,275,000
- Mortgage payoff: $280,000
- Other debt: $40,000
- Education (two kids): $200,000
- Final expenses: $15,000
- Total need: about $1,810,000
Now subtract what's already there. Say you have $150,000 through work and $50,000 in savings you'd leave for the family. That's $200,000 in resources.
$1,810,000 minus $200,000 leaves a gap of about $1,610,000.
That's the honest number. It's probably bigger than the round figure most people would have guessed, and it's a world away from "I have some coverage through work, I'm fine."
Two things this exercise almost always reveals
One: your real need is usually higher than your gut says, because people forget to count income replacement over time. Losing a $85,000 earner isn't an $85,000 problem; it's that number every year for as long as the family depended on it.
Two: the coverage is more affordable than the number makes it sound. A large term policy, which covers a set period like 20 or 30 years, costs a fraction of what people assume. You're not paying for $1.6 million in a vault somewhere; you're paying a small monthly premium for the promise that if the worst happens during the years your family is most exposed, they're whole.
That's the part the "it's too expensive" myth gets exactly backwards. The big number is the coverage. The price is small.
The bottom line
You don't need a rule of thumb. You need your number, and now you know how to find it: add up what your family would need, subtract what they already have, and the gap is your target. Then price the term coverage to close it, which will almost certainly cost less than you fear.
If you want a second set of eyes on your number, that's exactly what a free strategy call is for. It's worth noting that even in a world of instant online quotes, LIMRA's 2026 research found people still want to talk to a real professional before making this decision, especially younger buyers. That instinct is a good one. This is your family's safety net, not a phone plan.
The call is free, and if it turns out you're already in good shape, I'll be the first to tell you.
Y. Rafael Nicudemus is a retired Air Force veteran and a licensed Life, Health & Annuity producer. This article is educational and not a solicitation for insurance in any state where the producer is not licensed. Coverage needs and premiums vary by individual; figures shown are illustrative.
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