Guide
How much life insurance do you need?
Find a calculator here plus explanations of the factors that make up the estimate: years of income replacement, liabilities, schooling costs, and resources you may already have.
The standard approach is to calculate how much of your salary your dependents would require and then deduct existing resources. While this calculation is not exact and doesn't require mathematical precision: policies come in standard increments, and what you're seeking is a cushion sufficient to maintain stability through the critical years.
Coverage estimate
Starting estimate = (annual income × number of years) + liabilities + education expenses − existing insurance and liquid savings, rounded to $5,000 increments. This serves as your starting point, not as personalized counsel.
Why those inputs
Years of replacement income. Financial advisors typically suggest 10-20 years depending on how long dependents will need ongoing support. Households with small children in South Pasadena might lean toward the 20-30 year range given that costs for schooling, daycare and housing are often highest during those years.
Outstanding loans. Most households carry a mortgage as their biggest debt. Death benefit coverage sufficient to settle the mortgage gives your family the freedom to stay in the home if they wish, rather than being forced into a sale by cash constraints.
Childcare and education. A rough per-child figure in current dollars accounts for school and related expenses. It's straightforward to include this from the start rather than buying supplemental protection afterwards.
Existing resources. Bank balances that could offset expenses, plus group insurance provided through your employer. Remember that employer coverage typically ends when employment does, so most people count only a percentage of it.
Once you've arrived at a target figure, head to the quote tool to see 10-, 15-, 20-, 25- and 30-year options and the associated costs from available carriers. Many households opt for slightly higher coverage than their initial estimate because the per-month cost difference is marginal for younger applicants.