How Much Life Insurance Do I Need?

Life Insurance

I’m often asked, “How much life insurance do I need? Besides the Captain Obvious answer of “how much can you afford”, sometimes a measurement can help better answer the question…especially when you are raising a family who depends on you. Here are three simple measurements I hope can help you.

  1. 5-7 Years of Salary: Let’s say you make $50,000 a year. Wouldn’t it be very helpful to your family if your salary kept coming in for 5 more years should something bad happen to you? Having $250,000 of life insurance is the answer. Want 7 years of salary coming? Then $350,000 of life insurance would get the job done. Want more? I think you get the point. It’s simple…and your family can budget their life with less interruption.

  2. 100% of your Current and Future Debt: Whatever you owe today plus whatever you will owe tomorrow is a sensible life insurance policy amount. Sure, your mortgage and credit cards need payoff if you are gone…but always remember the bills down the road that come as your family grows…namely, college. Having both sets of debt covered is sleep insurance. A big pressure eased.

  3. 12-24 months Transition Expense: If you only need money to cover 1 or 2 years of transition expenses if you are no longer here, then remember to set up a fund to pay for final expenses, utility bills, cell phone charges due, bills you should have paid a month ago…really any liability you wouldn’t want someone else to pay….because sure enough, someone will have to pay it. Why burden those close to you with these.

    One more bonus idea…..Bump up your life insurance policy by 20% if your parents ever had a heart attack or diabetes. Sure enough, as you get older, life insurance companies will charge you higher premiums because of your family medical history…even if you are super healthy. Buy a little more now. It’s cheaper in the long run.

About the author: Brian Carroll is the CEO of Pivot Insurance and holds CLU & CPCU designations. He has been part of the life insurance industry for over 30 years. He is also an avid runner and has participated in many athletic endurance events. Brian established the anonymous life insurance quote process here at Pivot and takes pride in the caring and professional staff. You can reach Brian at 1-800-651-1953 or