How Much Life Insurance Do You Actually Need?

"How much coverage do I need?" is usually answered with a rough rule of thumb — ten times your salary, or some multiple pulled from a calculator. Those shortcuts aren't wrong, exactly, but they're not really about you either. A better starting point is the actual gap your family would face without your income.

Start with the gap, not a multiple

The real question is simple: if your income stopped tomorrow, what would your family need to cover — today's expenses, tomorrow's goals, and the debts already on the books? Coverage exists to close that gap, so the number should come from your situation, not a generic formula.

What actually belongs in the number

• Remaining debt — mortgage, loans, and anything else that wouldn't disappear with you
• Income replacement for the years your family would rely on it
• Future costs you'd still want covered, like college
• Final expenses, minus any savings or existing coverage you already have

Common shortcuts — and why they fall short

Salary multiples ignore debt load and family size. Employer coverage is often just one or two times your salary and doesn't follow you if you leave the job. Neither is wrong to consider, but treating either as the whole answer usually leaves a real gap unaddressed.

The bottom line

The right amount is the one that actually closes your family's gap — not the roundest number. A short conversation about your debts, income, and goals gets you there faster than any generic calculator.