Life insurance is an affordable way to protect the people you love and care about most. When you start exploring your life insurance options, you’ll have many choices to make—everything from the type of coverage to the company you get your policy from.
The right amount of life insurance needed will vary from person to person, so deciding how much life insurance you need can be tricky. Many people find that 10-15 times their income is enough coverage, but this simple approach might not always provide the support you’re looking for. Below are three main points to consider as you explore your life insurance options.
Think About How Much Life Insurance You Can Afford
When deciding how much life insurance you can afford, you should start by considering your current and future expenses, such as outstanding debt, a mortgage, or the cost of raising children. You want to make anyone who currently relies on your income would be able to meet long-term financial obligations as well as daily living expenses. Having the right amount of coverage will ensure your loved ones aren’t left with financial burdens when you pass away.
Use Our Life Insurance Calculator to Determine How Much Life Insurance You Need
With so many factors to consider when deciding how much coverage you need, it can be difficult to know where to start. Luckily, our life insurance calculator can help. By answering a few simple questions, you’ll get a better idea of how much coverage you need and how much it will cost.
Consider Which Term Life Policy Length Meets Your Needs
If you’re interested in term life insurance, you’ll have to decide what term length is right for you. Common term lengths include 10, 15, 20, 25, or 30 years. Depending on factors like your age, gender, budget, and financial goals, this is what the costs of these different policy lengths may look like for you.
Policy Length | Who Might Benefit: | Average Rate for a $1 Million Policy |
Someone with adult children who is approaching retirement | For a 55-year-old: $120.86/month for a male or $89.94/month for a female | |
Couples in their 40’s with older children | For a 45-year-old: $62.94/month for a male or $48.28/month for a female | |
Couples in their 30’s with elementary school-aged children | For a 35-year-old: $32.84/month for a male or $28.24/month for a female | |
Young couples (mid-twenties to early 30’s) with young children | For a 25-year-old: $40.23/month for a male and $27.82/month for a female | |
Young couples experiencing life milestones like marriage, buying a house, or having a baby | For a 25-year-old: $46.08/month for a male and $34.52 for a female |
Monthly rates are based on a 10-, 15-, 20-, 25- and 30-year term policies for men and women in excellent health from one or more of the trusted companies we represent. Rates were pulled 1/2024. Your price could vary depending on your health, issuing company, and other factors. Not available in all states.
Ask yourself: who depends on you for financial support?
Life insurance needs will look different for everyone. Whether you’re planning for the costs of supporting your children from childhood through college or ensuring your spouse would be financially secure if they were to lose your income, it’s important to consider all people who depend on you financially when making decisions about life insurance. Even business partners or people who’ve co-signed on loans should be taken into consideration. Overall, the more dependents you have, the more life insurance coverage you’ll need.
Consider Any Future Financial Needs
Life insurance is generally cheapest when you’re young and healthy, so buying your policy as early as possible will save you money in the long run. Purchasing a policy sooner rather than later not only locks in favorable rates for you but also helps ensure you and your loved ones will be protected for the future. For example, you may want to prepare for the cost of a college education while you’re children are still toddlers, ensure your spouse can pay off a future home loan, or make sure your family isn’t burdened with final expenses in the event of your passing. Buying a policy early will offer peace of mind that those who matter most to you will have the protection they need through different stages of life.
Find the Right Amount of Life Insurance for You with SelectQuote
Finding the right amount of life insurance for you can be tricky. After all, you want your loved ones to be protected, but you don’t want to overpay or be overinsured. Luckily, SelectQuote can help simplify the process. We’ll take the time to review your priorities for coverage and match you with quotes from a variety of trusted carriers in just minutes. Our licensed insurance agents can help you navigate all your options, ensuring you have the right amount of coverage at a price that fits your budget.
