How Much Life Insurance Do You Really Need?

Life insurance is how you protect the people you love. This quick worksheet helps you land on the right amount — and the right type — without overpaying.

1. 1

   Start with the income you’d replace

   Multiply your yearly income by the number of years your family would need it (often 10 years). Example: $40,000 × 10 = $400,000.

2. 2

   Add your debts

   Mortgage, car loans, credit cards — anything you wouldn’t want your family to inherit.

3. 3

   Add final expenses

   A funeral and related costs commonly run $10,000–$15,000. Final-expense coverage handles exactly this.

4. 4

   Add future goals

   College for kids, or anything you’d still want to provide. Add a realistic number.

5. 5

   Subtract what you already have

   Existing life insurance and savings reduce the gap. What’s left is roughly the coverage you need.

6. 6

   Mistake #1 — relying only on work coverage

   Job life insurance usually ends when the job does, and it’s often too small. Own a policy that’s yours to keep.

7. 7

   Mistake #2 — waiting

   Rates go up as you age, and health changes can limit options. The younger and healthier you are, the cheaper you lock it in.

8. 8

   Mistake #3 — buying the wrong type

   Term is cheaper for income replacement; whole life lasts forever and builds value; final-expense is built for seniors. The right fit depends on your goal.

9. 9

   Mistake #4 — guessing alone

   A 15-minute free review gets you the right amount and type without overpaying — no pressure.

This guide is general educational information only and is not financial or insurance advice. Edlando is not affiliated with or endorsed by any government agency.