How Much Life Insurance Do You Really Need?
February 6, 2026
The 10x Rule Is a Starting Point
You've probably heard the rule of thumb: get life insurance worth 10 times your annual salary. While that's a reasonable starting point, your actual needs depend on much more.
What to Factor In
Income replacement: How many years would your family need support? Multiply your annual income by that number.
Outstanding debts: Mortgage, car loans, student loans, credit cards — these don't disappear when you do.
Future expenses: College tuition for kids, childcare costs, or a spouse's career transition period.
Existing savings: Subtract what your family already has in savings, investments, and other insurance.
A Simple Formula
Coverage = (Annual Income x Years of Support) + Total Debts + Future Education Costs - Existing Assets
For a 35-year-old earning $75,000 with two kids and a $300,000 mortgage, coverage of $1-1.5 million is common. But a 25-year-old single renter might only need $250,000-$500,000.
The Good News
Term life insurance for a healthy 30-year-old can cost as little as $20-30/month for $500,000 in coverage. That's less than most streaming subscriptions combined.
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Cuanto seguro de vida realmente necesitas?
La regla del 10x es solo un punto de partida
Probablemente has escuchado la regla general: obtener un seguro de vida por 10 veces tu salario anual. Aunque es un punto de partida razonable, tus necesidades reales dependen de mucho mas.
Que considerar
Reemplazo de ingresos: Cuantos anos necesitaria apoyo tu familia? Multiplica tu ingreso anual por ese numero.
Deudas pendientes: Hipoteca, prestamos de auto, prestamos estudiantiles, tarjetas de credito — estas no desaparecen cuando tu lo haces.
Gastos futuros: Matricula universitaria para los hijos, costos de cuidado infantil, o periodo de transicion profesional del conyuge.
La buena noticia
El seguro de vida a termino para una persona saludable de 30 anos puede costar tan poco como $20-30 al mes por $500,000 en cobertura.