When choosing a life insurance policy, one important thing to consider is how much you’ll need. Someone who’s retired may not need as much as someone who’s raising a young family. There are different ways to calculate life insurance coverage based on your circumstances. Here are some thoughts to consider so you can figure out how much life insurance you need.


How many dependents do you have?

It’s generally advised that your amount of life insurance should be at least 10 times your current income. It may need to be even more when you factor in your mortgage, future childcare expenses, and other debts.

After you’ve calculated a specific number, some experts recommend that you also add at least

$100,000 in coverage per child1. The goal is for there to be a high enough death benefit to help support your family for multiple years and help take care of your end?of?life expenses. The more children you have, and the younger they are, the higher your life insurance might need to be. If you have aging parents or other elderly relatives you’re caring for, you may want to factor that into your life insurance calculation as well.

How long do you need the coverage?

Term life insurance offers insurance coverage for a certain amount of time, such as 5, 10, 20, or 30 years. The length of your term should be long enough to help cover your financial obligations. It also shouldn’t be so long that you’re paying for coverage that you don’t need.

For a person with young children, it might be smart to get 20 years of coverage. This could be enough time for your children to be financially independent by the end of your term limit, so you may no longer need the coverage. If you’re a parent to older teens, you may only need a 5 to 10?year term limit. Make sure to consider the possibility of your adult children moving back in after college.

Be mindful that if you’re close to elderly age, you might be restricted to 10 or 20?year terms. One of the benefits of longer coverage is that the rates are lower, especially if you get one when you’re young. If at any point you have less or no more need for the coverage, you could lower the coverage amount to decrease the premiums or cancel the policy. The cancellation of the policy may not lead to any penalties.

In some cases, a permanent life insurance option may be more suitable. It’s worth considering if you have disabled children or aging parents that need lifelong care, or if you want to leave a trust for your heirs.

How much debt and savings do you have?

You may have enough in savings to cover some expenses such as funeral costs or medical bills. In that case, you won’t need as much life insurance, particularly if you have no dependents. If you have an extensive amount of debt, such as student loans, car loans, or a mortgage, then you may need a higher life insurance plan. Once you have an answer to most of these questions, you may have a good idea of how much life insurance is best for your circumstances.


Investopedia. “How Much Life Insurance Should You Carry?” https://www.investopedia.com/articles/pf/06/insureneeds.asp Published May 25, 2022.

Coverage is underwritten by Aflac. In New York, coverage is underwritten by Aflac New York. This is a brief product overview only. Coverage may not be available in all states, including but not limited to NJ, NM, and NY. Benefits/premium rates may vary based on plan selected.

Optional riders may be available at an additional cost. Plans and riders may also contain a waiting period. Refer to the exact plans and riders for benefit details, definitions, limitations and exclusions. For availability and costs, please contact your local Aflac agent/producer. In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, and Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400 and Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. In New York, Policies: NY68100?NY68400.

Content within this article is for informational purposes only and does not constitute legal, financial or medical advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer will have to consider in their benefits decision? making process.

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