How Much Life Insurance Do You Need?


How much life insurance does a person need? Typically, most people need coverage that will be at least 10-15+ times their annual income. It all depends on one’s financial circumstances, debt load and needs.

How do Most Life Insurance companies determine how much you need? They toss a dime, or actually a D.I.M.E. This is a tried and true way insurance agents over the decades looked at. It still has a good purpose; it is called the DIME Method; this is how it works: 

Debt, how much liability in outstanding obligations do you have; like, credit cards, ____=

Income, multiply your annual income by 10 to 15 years, ____=

Mortgage, how much do you still owe, _____=

Education for kids, like college, _____=

Here are more considerations:

What about what you need for Retirement, ­­_____=

Now, what if you get sick, and your health insurance will not cover it? Many policies now have what is called “Living Benefits” that will cover you and it is not that expensive.

Then add it up…

Total, _______

Add all of the above, that will equal how much life insurance a family will need. Then decide what you can comfortably afford.

how much life insur

Here are some factors to consider.

There are also very good and beneficial Riders; you need to consider. These will save your family debt from medical costs and even bankruptcy. This is the wonder of Long-term Care. I believe no family will be left behind with this! There are also other extras like Child Term, Accelerated Death Benefit, Family Income Benefit, Guaranteed Insurability, Return of Premium, and Accidental Death.

There is also investment and savings previsions as well as retirement saving plans you can attach to these policies that will save you thousands of dollars while making an estate and a legacy. Consider the purchase as part of an overall financial plan.

Thus, your life insurance policy is about being a legacy, not death insurance!

You should also consider; will the policy have coverage for all financial obligations for at least ten years. Think about your family and loved ones.

Then, how much do you want to pay, will you be investing, and what do you want it to do?


Here is another way to determine how much Life Insurance you need.

Another way to determine the amount of life insurance that is needed is to multiply your annual income by the number of years left until retirement. Then add what is needed for retirement that is not already provided, like IRA and such. For example, if a 50-year-old person who is currently making $60,000 a year and will retire at 65, they will need at least $600,000 in life insurance, not including outstanding financial considerations and retirement.

If you still have children or grandchildren who are going to college, keep in mind college now averages $100,000 per child.

Consider that your income will likely will rise over the years, and so will your expenses. People who bought policies in the 70’s and 80’s who never updated them, then passed away in the last twenty years, left their families in trouble and in debt. Do not do that to your family. We are here to help.

Don’t skimp and leave your family in trouble. Buying a good life insurance policy will safeguard your family and loved one’s financial coverage.

Because of COVID-19, not all insurance companies are writing new life policies. We know who the best carriers that are and we know how to work with them. For the best information on how to deal with financial stress during this emergency. Just about all that is on this blog is designed to help you.


You will need to have an experienced and knowledgeable agent who is not captive to one company and can take a deep look at your needs and find you the best investment vehicle to match it. We can do that!

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